Bolstered by a resurgent Dalal Street, deals in the Indian equity
market are moving in blocks. Foreign institutional investors (FIIs),
brokerage houses, promoters of companies and mutual fund companies have collectively transacted securities worth Rs 1,450 crore through this window in the first 12 days of June on the Bombay Stock Exchange (BSE), which is almost four times the amount transacted in May.
Around 3,133 lakh shares have been transacted under this window till date this year, which is a 33% increase in the number compared to the said period last year. In monetary terms, the BSE has witnessed a volume of Rs 2,954 crore in the block deal category this year.
Analysts say the rising volumes are indicative of the returning confidence and liquidity to the Indian capital markets. “Block deals are directly proportional to the secondary market conditions. The flurry of block deals are testimony to the fact that institutional buyers are back in business,” Jagannadham Thunuguntla, equity head at SMC Capital said.
Usually, big shareholders in companies use this window to sell part of their stake to raise money. Since the deal is carried under a block, liquidity is absorbed without moving stock prices. For a transaction to qualify as a block deal, a minimum quantity of five lakh shares or a minimum sum of Rs 5 crore should be executed via a single transaction.
In June so far, 510 lakh shares in companies such as Tata Steel, IndiaBulls Real Estate, Wabco TVS and Sundaram Clayton have changed hands in 12 block deals on the BSE.
According to market pundits, FIIs are showing considerable interest in transacting deals under this window. Since it allows them to avoid the price fluctuations of the secondary market, they are more at ease dealing in the block deal segment.
FIIs which have a tendency to buy securities in bulk have pumped in close to Rs 6,000 crore in the Indian equity markets in June till date. In May, FIIs had bought securities worth more than Rs 20,000 crore to cheer the UPAs coming back to power at the centre.
Anup Bagchi, executive director of ICICI Securities, believes the brisk activity in the segment augurs well for the Indian stock market. “It signals the fact that capital has started moving between the large investors. Liquidity is no more a problem for the Indian markets,” he said.
Prithvi Haldea, chairman and managing director of Prime Database, a Delhi-based firm which tracks the capital market, however, feels the volumes are still modest. “Sensex has gone up by almost 90% in the last two months.
Taking that into consideration, the numbers are very small,” he said. Indian equity market, he said, will now await cues from the budget before the real action begins.
market are moving in blocks. Foreign institutional investors (FIIs),
brokerage houses, promoters of companies and mutual fund companies have collectively transacted securities worth Rs 1,450 crore through this window in the first 12 days of June on the Bombay Stock Exchange (BSE), which is almost four times the amount transacted in May.
Around 3,133 lakh shares have been transacted under this window till date this year, which is a 33% increase in the number compared to the said period last year. In monetary terms, the BSE has witnessed a volume of Rs 2,954 crore in the block deal category this year.
Analysts say the rising volumes are indicative of the returning confidence and liquidity to the Indian capital markets. “Block deals are directly proportional to the secondary market conditions. The flurry of block deals are testimony to the fact that institutional buyers are back in business,” Jagannadham Thunuguntla, equity head at SMC Capital said.
Usually, big shareholders in companies use this window to sell part of their stake to raise money. Since the deal is carried under a block, liquidity is absorbed without moving stock prices. For a transaction to qualify as a block deal, a minimum quantity of five lakh shares or a minimum sum of Rs 5 crore should be executed via a single transaction.
In June so far, 510 lakh shares in companies such as Tata Steel, IndiaBulls Real Estate, Wabco TVS and Sundaram Clayton have changed hands in 12 block deals on the BSE.
According to market pundits, FIIs are showing considerable interest in transacting deals under this window. Since it allows them to avoid the price fluctuations of the secondary market, they are more at ease dealing in the block deal segment.
FIIs which have a tendency to buy securities in bulk have pumped in close to Rs 6,000 crore in the Indian equity markets in June till date. In May, FIIs had bought securities worth more than Rs 20,000 crore to cheer the UPAs coming back to power at the centre.
Anup Bagchi, executive director of ICICI Securities, believes the brisk activity in the segment augurs well for the Indian stock market. “It signals the fact that capital has started moving between the large investors. Liquidity is no more a problem for the Indian markets,” he said.
Prithvi Haldea, chairman and managing director of Prime Database, a Delhi-based firm which tracks the capital market, however, feels the volumes are still modest. “Sensex has gone up by almost 90% in the last two months.
Taking that into consideration, the numbers are very small,” he said. Indian equity market, he said, will now await cues from the budget before the real action begins.
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