Block deals galore in June 2023. Deals worth nearly Rs 14,000 crore were done so far this month. Most of these were done by the private equity firms or promoters.

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Block deals are large transactions of shares between two parties that are negotiated privately and executed on the stock exchange platforms.

The recent block deal is in HDFC Asset Management Company wherein Abdrn sells 10.2 percent holding worth Rs 4,083 cr.

Other large block deals in June 2023 include Timken India where the parent company sells 8.5 percent stake worth Rs 1,950 crore at a 15 percent discount to the market price.

Krishna Institute of Medical Sciences (KIMS) was another company where the private equity investor sold stake worth Rs 685 crore.

Similarly, in the jewelery retailer, Kalyan Jewellers, private equity investors sold stake worth Rs 700 crore.

CMS Info Systems and Go fashion also saw private equity investors selling stakes worth Rs 720 crore and Rs 740 crore respectively.

Generally, the market perceives any stake sale by the promoter as worrisome as it may indicate that the promoter is losing confidence in the business or expecting lower growth in profits in future. However, this may not always be the case. At times, a stake sale is done by promoter to raise funds or meet regulatory requirements.

Within the banking sector, Kotak Mahindra bank was the only player witnessing a block deal during the month of June. the deal was worth Rs 5,800 crore where the Canada Pension Fund sold stake.

In the aerospace and defence manufacturing industry, MTAR Tech's promoter sold 4.3 percent stake of Rs 240 cr. In the second week of June, BSE sold a 4.5 percent stake in Central Depository Services (CDSL) through a block deal worth Rs 468cr to comply with market regulator SEBI norms which state a stock exchange is only allowed to hold a 15 percent stake in a depository. BSE previously held a 20 percent stake in CDSL.

The recent weeks have witnessed a jump in the number of block deals which emphasizes the huge liquidity in market.

(Edited by : Vahishta Unwalla)

First Published:Jun 20, 2023 4:23 PM IST