What are bulk deals on NSE and BSE? How are they different from block deals?

A transaction is called a 'Bulk Deal' transaction when the number of shares being traded in the transactions is more than 0.5% of the total share capital. So, for eg: If Reliance Industries has about 1,000 shares and you buy or sell 5 or more shares of the company, then your transaction is a 'Bulk Deal'. 

No, not that kind of bulk. 

In a Bulk Deal, you can buy or sell a larger number of shares through a normal trading window or even through a different Block Deal window via a broker. Your broker has to share the information of Bulk Deals with the stock exchanges immediately once the trade is executed. 

Sometimes, sellers and buyers also prefer to conduct ''sliced trades'' during the day to conduct Bulk Deals. This means that brokers buy and sell at different times of the day in order to get a better average price for their trade since they can take advantage of any volatility during the trading time. Now, if brokers conduct a sliced trade throughout the day, they have to inform the stock exchange within an hour of the close of trade. 

But what does it indicate? Consistent Bulk Deals can indicate that informed investors have an increasing interest in a particular stock. This can steer the prices of a stock in an upward direction. But the reverse holds true too. Also, when one big company acquires shares of another company, it is usually reflected in the Bulk Deals report that is available on the stock exchange's website.

For eg: In February 2022, news spread that Crompton Greaves Consumer Electricals (a consumer electronics company) will acquire a 55% stake in Butterfly Gandhimathi Appliances (another appliance company). This news was confirmed in March 2022, when Crompton actually acquired Butterfly's shares, and the same was reflected in the ''Bulk Deals'' report on the NSE website. (Go to the NSE website> Products > Equities > Historical Data > Bulk Deals)

Bulk Deals v/s Block Deals

People often confuse Bulk Deals with Block Deals. Here's a quick difference:

1. Block Deals are trades where each transaction is worth Rs 5 crore or involves trading at least 5 lakh shares. Bulk Deals are those transactions that involve trading in more than 0.5% shares of the total share capital. 
2. Block Deals are mandatorily traded on a different trading window and traders don't get to know about it until the deal is mentioned in the Block Deal report on the NSE/ BSE website. Bulk Deals are made on the same trading window as that of normal stock trades and hence are visible to everyone. 
3. Block Deals have to be conducted between 9.15 am to 9.50 am while Bulk Deals can be conducted throughout the day.