Bulk deal
All transactions in a listed stock where the total quantity bought or sold exceeds 0.50 per cent of the company's listed equity shares — in one trade or several in a day — reported and disclosed the same day.
In plain language
When someone accumulates or sells a meaningful slice of a company in the open market, other investors want to know. The bulk deal rule makes sure they do.
If the total quantity of a company's shares bought or sold exceeds 0.50 per cent of its listed equity shares, the transactions are a bulk deal. It does not matter whether that happened in one trade or twenty over the day — the total is what counts. The broker reports it and the exchange tells the public the same evening.
How it works
Section 4.5.4 and the workbook glossary:
| Feature | Rule |
|---|---|
| Threshold | Total quantity bought or sold exceeds 0.50 per cent of the total equity shares of the company listed on the exchange |
| How reached | A single transaction or multiple transactions during the trading day in the normal market segment |
| Where traded | The normal trading window, at any time during trading hours — visible to all market participants |
| Reporting | The broker reports immediately to the exchange: scrip, client name, quantity and traded price |
| Disclosure | The exchange disseminates it to the public the same day after market hours |
Bulk versus block:
| Bulk deal | Block deal | |
|---|---|---|
| Test | Quantity above 0.50% of listed shares | Order size of at least Rs 25 crore |
| Window | Normal market | Special window |
| Number of trades | One or many in the day | One |
| Visible while trading? | Yes | No |
| Disclosure | Same day, after hours | Same day, after hours |
A worked example
Illustrative figures. A mid-sized company has 20 crore equity shares listed on the exchange.
0.50% of 20 crore = 10 lakh shares
A portfolio manager's client buys in the normal market through the day:
| Time | Shares bought |
|---|---|
| 10.15 am | 3,00,000 |
| 12.40 pm | 3,50,000 |
| 2.55 pm | 4,50,000 |
| Total | 11,00,000 |
No single order exceeded 10 lakh shares, but the day's total of 11 lakh is 0.55 per cent of listed shares — above the 0.50 per cent threshold. It is a bulk deal.
At an average price of Rs 240, the purchases are worth about Rs 26.4 crore. The broker reports the scrip, client name, quantity and price to the exchange, and that evening anyone can see who bought 11 lakh shares — whereas every one of those three orders was already visible in the order book as it traded.
Why NISM asks about it
Chapter 4 (Secondary Markets), section 4.5.4, defines bulk and block deals together, and the workbook glossary repeats the bulk deal definition. The questions: the 0.50 per cent threshold, that it can be reached through multiple trades in a day, that it happens in the normal window, and when it is disclosed.
Common exam traps
- The threshold is exceeding 0.50 per cent of listed equity shares — a quantity test, not a rupee value.
- Multiple transactions in the day count together. Splitting an order does not avoid the rule.
- Bulk deals happen in the normal market and are visible; block deals use a special window and are not.
- The broker reports immediately; the exchange publishes after market hours the same day.
- A block deal has a Rs 25 crore minimum; a bulk deal has no rupee minimum. Mixing the two thresholds is the standard error.
Check yourself
1.Which statement about block deals is correct?
- a)The minimum order size is ₹5 crores and they may be squared off intra-day
- b)The minimum order size is ₹25 crores, the price must be within +/- 3 percent of the reference price, and they must be settled by actual delivery
- c)They take place in the normal trading window and are visible to all participants
- d)They are never disclosed to the public
Show the answer
Answer: (b) The minimum order size is ₹25 crores, the price must be within +/- 3 percent of the reference price, and they must be settled by actual delivery
The minimum order size for a block deal is ₹25 crores. The difference between the order price for a block deal and the reference price should not be more than +/(-) 3 percent. And all block deals are required to be settled by actual delivery and cannot be squared off or reversed.
Option C describes a bulk deal, which takes place in the normal trading window at any time during trading hours and is visible to all market participants, and is defined by quantity exceeding 0.50 percent of the total number of equity shares of that company listed on the exchange.
Option D is wrong: stock exchanges are required to disseminate all details of block deals to the general public after the market hours on the same trading day. The special window protects confidentiality during execution, not afterwards.
The windows: the morning window from 8.45 am to 9.00 am with the previous day's closing price as reference, and the afternoon window from 2.05 pm to 2.20 pm with the volume-weighted average price of trades executed from 1.45 pm to 2.00 pm as reference.
Where this is taught
- Series VII · Chapter 3: Introduction to Securities Broking Operationsintroduced here
- Series XII · Chapter 4: Secondary Marketsintroduced here
Related terms
- Block dealA single large trade of at least Rs 25 crore, executed in a special exchange window within 3 per cent of a reference price, settled by delivery and disclosed after market hours.
- Circuit breakerA pre-set percentage move in a stock or index that triggers an automatic halt or limit in trading, giving the market time to assess instead of trading on panic.
- Price bandThe highest and lowest price at which a contract may trade on a given day, set as a percentage of its base price to block erroneous and manipulative orders.