Block deals triggered rally over 4 months

Block deals have been the hallmark of the current rally, driving the market almost 23.4 per cent in the last four months.

The market has recorded 217 block deals between May 17 and September 17 with more than 12.38 crore shares worth almost Rs 1,300 crore changing hands.

According to markets sources, the current rally has provided an exit route for a lot of old domestic as well as foreign institutional investors.

At the same time, in a few instances, these stocks have been picked by newer recently-registered funds. The striking example has been the case of Bharti Tele-Venture where Warbug Pincus sold nearly 14 per cent of its holding to a consortium of around 20 FIIs. The over 1,000 crore deal was one of the biggest block deal executed in the last four months.

Ambreesh Baliga, vice-president, Karvy Stock Broking, said "Its seems the recent spurt in block deals is more of a capital gain adjustment. Most block deals are happening within the family to book losses in the books to offset against their earlier profits."

In Shalimar Products, individual investors sold 2,69,400 at 0.95 paise and bought over 3 lakh shares the same day at Re 1.00. The trend is more pronounced in low cap stocks.

In mid-cap category, data on block deals suggests more of shares changing hands between two FIIs.

In a block deal executed on the UTI Bank counter on Wednesday, nearly 4.3 per cent of the bank's equity changed hands with Barclays Capital buying 1,00,56,000 shares from CitiCorp Banking Corporation at Rs 134.91 a share.

This was Barclays first private equity investment in India. Similarly, a lot of new funds recently registered in India have picked shares in block deals over the past few months.