When promoters sell shares of Hundreds of crores in value through 'Block Deal' at a particular price then who is the buyer on the other side?

Who buys those lakhs of shares from an individual seller?

Usually block deals are between institutions. Check this as well. 

Hello Trader,

I have been reading on this topic myself and had the same questions as you.

Some facts you would like to know:

1) Block deals are pre arranged transactions executed between the seller and buyer at a prearranged time on the exchange.

2) If the seller does not find a buyer for the large quantity, the seller sells the holdings in the open market in small quantities.

I have copied the below info from an older thread on the net for quick reading:

  • In every deal, there is a buyer and a seller.
  • The buyer is bullish and seller is bearish (or not so bullish).
  • Thus a block deal does not mean much.
  • However, if a stratergic buyer is buying into a stock and is expected to bring his¬†expertise/additional business¬†to the company, it is a¬†positive for the company.
  • It is important who is buying and who is selling.
  • It is not possible to have a general rule "block deals are good" or "block deals are bad".
  • It varies from case to case.

http://www.e-investing.in/day-trading/537-block-deals.html

Hope this helps.

1 Like