Bulk and Block Deals

• Factor	Bulk Deal 📊	Block Deal 🏦
  Stock Price Impact	Can cause price fluctuations due to open market execution.	Minimal impact since trades happen at a pre-negotiated price.
  Market Sentiment	Signals high investor interest, influencing buying/selling behavior.	Typically neutral but can indicate strategic investor moves.
  Volatility	High, especially if the deal involves a large quantity at once.	Low, as deals occur in a separate window.
  Retail Investor Reaction	If a known investor buys, sentiment turns positive; if they sell, it may trigger panic selling.	Generally stable, but a big Block Deal from a promoter or institutional investor may signal confidence or exit.

  ✅ Key Takeaway:

  • Bulk Deals can trigger short-term volatility, while Block Deals indicate strategic moves by big investors.
  • Tracking such deals can provide insights into market trends and institutional activity.

• 📊 Bulk Deal Regulations

  1️⃣ Minimum Threshold: A single trade or cumulative trades in a day must be ≥ 0.5% of a company’s total equity shares.
  2️⃣ Execution: Happens during normal market hours on the stock exchange.
  3️⃣ Price Transparency: Must be executed at the prevailing market price, ensuring fair trading.
  4️⃣ Reporting Requirement: If executed in a single trade, it is automatically visible to the public. If done in multiple trades, the broker must report it to the exchange before 5 PM on the same day.

  🏦 Block Deal Regulations

  1️⃣ Minimum Deal Size: A single trade must be ₹10 Cr or more.
  2️⃣ Execution Window: Can only be conducted in the Block Deal window, which operates in two sessions:
  🔹 Morning window: 8:45 AM – 9:00 AM
  🔹 Afternoon window: 2:05 PM – 2:20 PM
  3️⃣ Pre-Negotiated Price: Must be within ±1% of the previous day's closing price.
  4️⃣ No Splitting: Orders must be placed as a single transaction (cannot be broken into smaller trades).
  5️⃣ Reporting: Must be reported immediately to the exchange after execution.

  ✅ Key Takeaway:

  • Bulk Deals follow open market rules and can impact stock prices.
  • Block Deals occur in a controlled window to reduce market disruption.
  • SEBI ensures transparency and prevents market manipulation through strict reporting and execution norms.

• 1️⃣ Single Trade (≥ 0.5% of Equity Shares)

  • If a Bulk Deal is executed in a single trade, it is automatically visible to the public on the exchange.

  2️⃣ Multiple Trades (Adding up to ≥ 0.5%)

  • If a Bulk Deal is completed through multiple trades in a single day, the broker must report it to the exchange before 5:00 PM on the same trading day.
  • The exchange then publishes the details on its website for transparency.

  Information Reported in Bulk Deals

  🔹 Name of the stock 📊
  🔹 Name of the buyer & seller (if disclosed) 🏦
  🔹 Quantity of shares traded 📈
  🔹 Trade price (at market rate) 💰
  🔹 Percentage of total equity involved 🔄

1. 📥 Entering a Stock (Buying Strategy)

   1️⃣ Accumulation Without Market Disruption 🏦

   • Block Deals allow institutional investors (FIIs, DIIs, Mutual Funds) to buy large quantities at a pre-negotiated price without impacting stock price.

   2️⃣ Building Confidence & Signaling 📊

   • A Bulk Deal by a well-known investor signals strong confidence, attracting more buyers and pushing prices up.

   3️⃣ Strategic Stake Acquisition 🔄

   • Institutions use Bulk Deals to slowly accumulate shares over time, especially when they expect long-term growth in the company.

   ---

   📤 Exiting a Stock (Selling Strategy)

   1️⃣ Reducing Market Impact & Panic Selling 📉

   • Block Deals help big investors exit without affecting prices significantly, as they don’t go through open-market trading.

   2️⃣ Profit Booking & Rebalancing Portfolio 💰

   • Funds use Bulk Deals to sell at peak valuations, especially after significant stock appreciation.

   3️⃣ Avoiding Regulatory Issues ⚖️

   • Large shareholders (like promoters or PE firms) use Bulk or Block Deals to offload shares in a structured manner without violating SEBI’s insider trading rules.

• 📍 Where to Track?

  🔹 NSE & BSE Websites – Official daily disclosures.
  🔹 Stock Market Apps – Zerodha, Upstox, Groww (real-time alerts).
  🔹 Financial News Portals – Moneycontrol, CNBC, ET Markets.

  📊 How to Analyze?

  ✅ Who is Buying/Selling?

  • FIIs, Mutual Funds buying = bullish 📈
  • Promoter selling = caution ⚠️

  ✅ Volume & Frequency

  • Multiple Bulk Deals = Strong trend
  • One-time deal = Less impact

  ✅ Deal Price vs. Market Price

  • Block Deal at a premium = Positive sign
  • Block Deal at a discount = Possible weakness

  ✅ Check Fundamentals Before Investing

  • Combine deal insights with company performance & industry trends.

1️⃣ 🔄 Minimize Market Impact

• Large trades in the open market can cause high volatility & price fluctuations.
• Block Deals allow big trades without disrupting stock prices.

2️⃣ 📊 Maintain Price Stability

• Pre-negotiated pricing (±1% of previous close) avoids sudden price spikes/drops.
• Helps avoid panic selling by retail investors.

3️⃣ 🏦 Discreet & Efficient Execution

• Institutional investors (FIIs, DIIs, PE funds) can enter/exit positions quietly.
• Faster execution without multiple small trades in the open market.

4️⃣ ⚖️ Regulatory Compliance & Transparency

• SEBI-mandated reporting ensures fair transactions.
• Avoids insider trading risks for promoters reducing stake.

5️⃣ 💰 Better Negotiation Power

• Buyers & sellers agree on a mutually beneficial price, unlike open-market trades at fluctuating rates.

📊 Impact on Liquidity

✅ Increase Liquidity 💰

• Bulk & Block Deals bring high trading volumes, improving stock liquidity.
• More liquidity = easier buying & selling for investors.

⚠️ Liquidity Drain 🚨

• If a large investor exits, floating stock reduces, affecting future liquidity.

📉 Impact on Volatility

✅ Block Deals = Low Volatility 📊

• Trades happen in a separate window at a pre-negotiated price, minimizing market disruption.

⚠️ Bulk Deals = High Volatility ⚡

• Executed in the open market, leading to price swings based on supply & demand.
• Large buy orders → Price surge 📈
• Large sell orders → Panic selling 📉