Will there be new rules for block deals now?:

News Topical, Digital Desk : SEBI has indicated that it will not change the rules for the special block deal window, despite calls from investment bankers to simplify the process. There are two block deal windows on each trading day: from 8:45 am to 9:00 am and from 2:05 pm to 2:20 pm. Trades can be made in these windows only if the deal price is within ±1% of the previous day's closing price.

Where is the problem?

The 1% limit is considered too strict. Many deals do not fit into this limit – especially when there is high volatility in the market. Investment bankers want this limit to be increased to ±3%, so that more deals can happen through this special window.

What is SEBI's stand? SEBI officials say: - If a seller wants to give a higher discount, he can use the normal market platform. We will not make any changes in the rules right now.

Why is the block deal window special? In this, the seller can sell shares to his preferred buyer. There is no such control in the general market – due to which unwanted buyers can take up the deal. Big investors (such as mutual funds, institutional players) usually prefer to transact through this special window.

What does the recent trend say? In May, the block deal figure crossed ₹ 70,000 crore – the highest level in 9 months. Although most of the deals happened through the open market, very few through the special window.

Industry experts' opinion: - The 1% limit is certainly narrow, but deals are not stopping. If the rules are relaxed, the process will become a little easier. SEBI will maintain status quo for now. As long as block deals continue to happen in the market - even if they are from the open market - the need for relaxation in rules will not be given priority.