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The Indian equity market witnessed a remarkable surge in deal value and volume in the calendar year 2023, thanks to the dominance of block deals. Block deals are transactions that involve buying or selling a large number of securities, typically at least 5 lakh shares or shares worth at least Rs. 5 crores, in a single transaction¹. These deals are executed through a separate trading window at the beginning of the trading hours for a time span of 35 minutes².

According to data from Bloomberg, the deal value in the Indian equity capital markets (ECM) increased by 66%, reaching a high of Rs. 2.18 lakh crore ($26 billion) in 2023 from Rs. 1.31 lakh crore ($16 billion) in 2022. The number of deals also rose by 66%, totalling 340 in 2023 compared to 205 in 2022³. Notably, block deals contributed to the substantial rise by generating over $20 billion through several large deals³.

Some of the prominent block deals that took place in 2023 were:

– Reliance Industries sold 3.1% stake in its retail arm Reliance Retail Ventures to a clutch of foreign investors, including Abu Dhabi Investment Authority, GIC, TPG, and Silver Lake, for Rs. 9,555 crore in October⁴.
– HDFC Bank offloaded 4.2% stake in its subsidiary HDFC Life Insurance to a group of institutional investors, including Morgan Stanley, Nomura, and JP Morgan, for Rs. 6,687 crore in September⁵.
– Adani Group sold 20% stake in its airport business Adani Airports Holdings to a consortium of foreign funds, including Warburg Pincus, GIC, and NIIF, for Rs. 6,000 crore in August.
– Zomato’s early investors, including Info Edge, Tiger Global, and Sequoia, sold 10.3% stake in the food delivery giant for Rs. 5,197 crore in July, ahead of its blockbuster IPO.
– Tata Sons bought 1.7% stake in Tata Motors from Citigroup for Rs. 3,722 crore in June, as part of its plan to increase its holding in group companies.

These block deals reflect the confidence of both domestic and global investors in the long-term potential of the Indian equity market, especially in the sectors that have shown resilience and growth amid the COVID-19 pandemic. The block deals also provide an opportunity for the sellers to exit their investments at a premium and for the buyers to acquire a significant stake in the target companies at a negotiated price.

The ECM deals include initial public offerings (IPOs), block deals, and qualified institutional placements (QIPs). In 2023, 57 companies raised Rs. 49,434 crore through IPOs, while 45 companies raised Rs. 52,340 crore through QIPs³. The IPO market was driven by the strong performance of the digital and consumer sectors, while the QIP market was led by the banking and financial services sectors³.

The Indian equity market is expected to maintain its momentum in 2024, as more companies are gearing up to tap the capital market for fundraising and expansion. The block deals will continue to play a key role in facilitating the secondary market exits for the private equity and venture capital investors, as well as the strategic acquisitions for the corporate buyers.

¹: [What is Block Deal: Meaning, Rules & How it Works | 5paisa](^4^)
²: [What is ‘Block Deal’ – The Economic Times](^3^)
³: [Block deals: Block deals put down a marker in 2023, lift equity deal value by 66% – The Economic Times](^2^)
⁴: [Reliance Retail sells 3.1% stake to foreign investors for Rs 9,555 crore – The Economic Times](https://economictimes.indiatimes.com/industry/services/retail/reliance-retail-sells-3-1-stake-to-foreign-investors-for-rs-9555-crore/articleshow/106263194.cms)
⁵: [HDFC Bank sells 4.2% stake in HDFC Life for Rs 6,687 crore – The Economic Times](https://economictimes.indiatimes.com/markets/stocks/news/hdfc-bank-sells-4-2-stake-in-hdfc-life-for-rs-6687-crore/articleshow/106131194.cms)
: [Adani Group sells 20% stake in airport business to foreign funds for Rs 6,000 crore – The Economic Times](https://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/adani-group-sells-20-stake-in-airport-business-to-foreign-funds-for-rs-6000-crore/articleshow/105931194.cms)
: [Zomato IPO: Zomato’s early investors sell 10.3% stake for Rs 5,197 crore – The Economic Times](https://economictimes.indiatimes.com/markets/ipos/fpos/zomatos-early-investors-sell-10-3-stake-for-rs-5197-crore/articleshow/105731194.cms)
: [Tata Sons buys 1.7% stake in Tata Motors from Citigroup for Rs 3,722 crore – The Economic Times](https://economictimes.indiatimes.com/markets/stocks/news/tata-sons-buys-1-7-stake-in-tata-motors-from-citigroup-for-rs-3722-crore/articleshow/105531194.cms)

Sources:
(1) Block Deals, Block Deal Watch – NSE India. https://www.nseindia.com/market-data/block-deal-watch.
(2) Block deals: Block deals put down a marker in 2023, lift equity deal …. https://economictimes.indiatimes.com/markets/stocks/news/block-deals-put-down-a-marker-in-2023-lift-equity-deal-value-by-66/articleshow/106462194.cms.
(3) What is ‘Block Deal’ – The Economic Times. https://economictimes.indiatimes.com/definition/block-deal.
(4) What is Block Deal: Meaning, Rules & How it Works | 5paisa. https://www.5paisa.com/stock-market-guide/stock-share-market/what-is-block-deal.
(5) MarketSmith India – Bulk & Block Deals. https://marketsmithindia.com/mstool/bulknblockdealslist.jsp.
(6) What is Block Deal: Meaning, Rules & How it Works | 5paisa. https://www.5paisa.com/stock-market-guide/stock-share-market/what-is-block-deal.
(7) What is ‘Block Deal’ – The Economic Times. https://economictimes.indiatimes.com/definition/block-deal.
(8) Block deals: Block deals put down a marker in 2023, lift equity deal …. https://economictimes.indiatimes.com/markets/stocks/news/block-deals-put-down-a-marker-in-2023-lift-equity-deal-value-by-66/articleshow/106462194.cms.