What is a ‘Block Deal’?

Block Deal is a single transaction between two institutional players or two parties of a minimum quantity of 5 lakh shares or at least Rs. 5 Crores in value. This usually happens at the start of trading hours for about 35 minutes through a separate trading window. It has the following features:

• The Deal is comprised of the order of a minimum quantity of 5 lakh equity shares or a value of Rs. 5 Crores.
• All the trades should be delivered as ‘Block Deal’ orders cannot be reversed or even squared off.
• The real price of the share should fall between +1% to -1% of the current market price.
• The broker has to make disclosure the details of the transaction to the exchange immediately. These should include the name of the script, the name of clients, the quantities of shares involved, traded price etc.