Block deals evaporate from Indian markets

The block deals of various stocks have almost dried up in April, with only one deal taking place throughout the month.

During the entire month, the only block deal that took place on the Bombay Stock Exchange was that of HDFC Bank. According to the block deal data available on BSE, Aegon Custody B V - MM Emerging Markets Fund sold a total of 7,99,386 shares of the bank. The shares were sold at Rs 910.3 apiece, valuing the transaction at Rs 72.76 crore.

These shares were bought by TKP Investments BV - Aegon Custody B V-RE AGMM Emerging Markets Fund.

This is a steep fall from the same month last year when markets had witnessed 23 block sales and 22 block buys. About six transactions during April 2019, pertained to Coffee Day Group and late VG Siddhartha selling their 3.27 crore shares in IT services provider Mindtree to Larsen & Toubro. The deal, which took place on April 20, 2019, in six tranches, fetched CCD and Siddhartha a combined sum of Rs 3,210 crore.

The block deals have witnessed a steeper decline on a sequential basis. In the month of March 2020, BSE witnessed 31 block sales of shares and 31 block buys -- 10 of which pertained to Mukesh Ambani-controlled Reliance Industries and four to various Godrej businesses.

Experts say that there is a general sense amongst large institutional investors to preserve capital and cash in case things take turn for worse. So the demand for large blocks on the buy-side has completely vanished, analysts say.

"There is no interest in India or Indian businesses with quantitative easing and stimulus across the world. Markets will need to settle before we see a return of deals, at the earliest after the lockdown," analysts on the street say.

The minimum order size for the execution of trades in the block deal window shall be Rs 10 crore, according to BSE. There shall be no minimum quantity check applicable.