A block deal refers to a single transaction involving a large quantity of shares, typically negotiated privately between institutional investors. Executed...
A block deal is a large, privately negotiated trade of shares between two parties, typically institutional investors, which is executed through a separate trading window on a stock exchange to avoid disturbing regular market prices.
While specific regulations vary by market, a block deal generally involves a minimum threshold, such as 500,000 shares or shares valued at least INR 10 crore (approximately 1.2 million USD) in the Indian context.
Investors opt for block deals to execute very large transactions without creating significant price volatility or impacting the stock's price discovery process in the open market, ensuring better execution for substantial volumes.
Block deals can signal significant institutional interest or exit, potentially influencing investor sentiment and the stock's future price trajectory, especially if a prominent investor or a large percentage of outstanding shares is involved.