Block deals in Indian equities rose to a three-year high in June

Mumbai: With the country's stock markets reaching new highs, a huge increase in block deals is also being seen in June. A total of $3.90 billion worth of shares changed hands in the year ended June. This number of block deals is at a three-year high. Earlier in May 2020, block deals worth $4.70 billion were done.

If more than five lakh shares of a company or shares worth Rs five crore change hands in a single deal, it is considered as a block deal.

Generally, in block deals, the shares are bought only by institutional investors. Whenever equities rise, promoters take advantage of the opportunity to sell their shares and choose to raise funds, said an analyst.

As confidence in the market builds, first block deals and then IPOs see momentum. At the end of the current month, the country's stock markets closed at new highs.

A high number of block deals indicates that Indian stock markets are in a healthy state. When an investor invests a large amount in a company, he first looks at the movement of the company as well as the market.

Looking at the current boom in the secondary market, it cannot be ruled out that the IPO activity in the country will also increase in the final phase of the current year and in 2024, said another analyst.