Block deal vs bulk deal: how startup investors sell shares after an IPO

A block deal is a single large trade on the stock exchange, usually between institutions, that is fixed in advance and carried out in a separate trading window rather than in the normal flow of orders. Because the price and size are agreed early, the seller can exit a big stake without pushing the share price down through many small trades.

Exchanges allow block deals only in set windows, one early in the morning and one in the afternoon, and the price must stay within a narrow band of the market price. As of November 2026, the minimum size is a trade of at least ₹10 crore, but check the current exchange circulars, because the rules have been revised before.

The window is set by the exchange, and trades outside the band around the market price are not allowed. This keeps the deal from becoming a way to move the price.

A bulk deal is a different idea. It is not a special window: it is a label put on trades done in the normal session when the total quantity bought or sold by one client in a company's shares in a day is above a set share, which is 0.5 percent of the company's listed shares.

The exchanges publish bulk deals at the end of the day, naming the buyer, the seller, the quantity and the price. This is how reporters learn that a fund or investor has traded a large amount.

Notice that a bulk deal is defined by the share of the company, while a block deal is defined by money. A trade of the same size could be small for a company with many shares and large for a smaller one.

The two are easy to mix up, so here is a quick comparison.

• Block deal: one large trade, agreed in advance, done in a special window, with a minimum value.
• Bulk deal: any trading in the normal session that crosses a percentage of the listed shares in a day.
• Both are disclosed publicly, with the names of the parties, after trading.
• A big trade can be one or the other, depending on how it was done.

Before a company lists, its early investors, such as venture funds, hold shares they could not easily sell. After the lock-in ends, they can sell. A large holder cannot dump millions of shares in the normal market without pushing the price down, so a block deal gives them a way to find a buyer in one go.

Venture funds also have their own clocks. A fund that invested years ago needs to return money to its backers, so selling part of a listed holding is a normal step, not a sign of trouble. Some investors also sell to book profit and reinvest in newer companies.

Employees who got shares through stock options may also sell through the market, but their stakes are usually small and do not show up as bulk or block deals.

The buyers are usually mutual funds, insurers, foreign portfolio investors and sometimes sovereign or pension funds, which want a large position at a known price. Sometimes the buyer is another long-term investor who is increasing an existing stake.

A block deal is often arranged by a bank or broker that finds the buyers before the window opens, so the trade appears in the market already matched.

Buyers like block deals for a simple reason: they get a large quantity in one go, often at a small discount to the market price, with the price known before they commit.

A typical headline says that an investor sold a stake worth some crores through a block deal. Look for four things: the percentage of the company sold, the price per share, who bought and what the investor still holds.

A sale of 1 percent by an investor who holds 15 percent is a small trim. A sale that takes a fund from 8 percent to zero is an exit. The share price may move on the news, but that tells you about sentiment on the day and not about the company's results. Also, a headline may say sold when it means sold part of its holding, so read to the end.

Another trap is the buyer's name. Exchanges report the client that traded, which may be a fund's account or a broker acting for someone. A name that looks unfamiliar is not always a new investor, so cross-check with the company's shareholding pattern, which is published every quarter.

Not in a block deal, since it is an institutional window. A bulk deal happens in the normal session, so in principle anyone trading that day is part of the market, but the label applies only to a single client crossing the threshold, which ordinary investors rarely do.

What retail investors can do is read the disclosures. Exchanges publish both kinds of deals daily, and the quarterly shareholding pattern shows how stakes changed over time. Use these facts for understanding, and note that nothing here is investment advice.

Post-IPO sales cannot happen until the lock-in ends, which our guide on the IPO lock-in period covers. Investors may also sell part of their shares inside the IPO itself, through an offer for sale, or sell privately in a secondary deal before the listing.

Block and bulk deals are among the few exit routes that happen in the open and are reported the same evening. That is why they feature so often in news about listed startups. This guide describes how the market works and is not investment, legal or tax advice. Check the latest rules with a qualified professional.

A sale of this kind does not raise money for the company. The cash goes to the selling investor, unlike a QIP or a fresh issue, where the company issues new shares. That is a common point of confusion in headlines.