A bulk deal occurs when many company shares are bought or sold in a single transaction on a stock exchange, typically by institutional investors like mutual funds or corporations, exceeding a certain percentage of total outstanding shares. These transactions are reported for public disclosure post-trading day, reflecting significant market movements by major players.
Key points about bulk deals:
- Large volume: The number of shares traded in a bulk deal must surpass a set threshold, usually a percentage of the company's total outstanding shares.
- Institutional investors: Bulk deals are primarily done by large investors like mutual funds, hedge funds, or asset management companies.
- Normal trading hours:
Unlike block deals, bulk deals happen during regular market trading hours.
- Public disclosure:
All bulk deals are reported to the stock exchange and made public after the trading day, providing market transparency.
How a bulk deal happens:
- Initiation: An institutional investor decides to buy or sell a large quantity of a company's shares.
- Order placement: The investor places a large order through their broker during regular market hours.
- Execution: The broker executes the order on the stock exchange, matching the buy and sell orders.
- Reporting: The stock exchange records the details of the bulk deal, including the buyer, seller, quantity, and price.
- Public disclosure: After the trading day, the exchange publishes information about the bulk deal on its website, allowing market participants to see the details.
