Here's an insight into block deals!

These transactions mostly take place between institutional players, such as mutual funds, hedge funds, endowment funds, etc.

A block deal is a one-shot transaction in which a minimum of 5 lakh shares or shares worth Rs 5 crore are traded. These transactions mostly take place between institutional players, such as mutual funds, hedge funds, endowment funds, etc.  

This type of transaction takes place in a window that is open for 35 minutes after the trading session commences. Deals of this nature have to be reported to the exchange immediately by the broker.  

Amongst the details to be provided, the broker has to furnish the data pertaining to the name of the scrip, name of the clients (both buyer as well as seller), number of shares traded, and the price at which the trade was executed. Upon the closing of the trading session, the exchange has to make this information public.  

Another characteristic of this deal is that every trade has to result in delivery and such a trade cannot be squared off or reversed. Moreover, the price at which the deal is being executed should be within the range of +1 per cent to –1 per cent of the current market price or the previous day's closing price, whichever is applicable. 

Block deals enable institutional investors to execute large trades without the markets knowing about it. This secrecy helps in executing the trade without impacting the share price, thereby prohibiting the transaction risk.