Block deal transactions by foreign institutional investors registered a significant fall in October and November. The decline was mainly because of major deal makers cashing out of the equity market to make good their mark-to-market losses and meet redemption pressure.
Block deal data provided by Bombay Stock Exchange and National Stock Exchange show daily average transactions declining to Rs 113 crore (Rs 1.13 billion) in the two months under review compared with Rs 305 crore (Rs 3.05 billion) in the July-September quarter.
A deal of a minimum of 500,000 shares or a minimum value of Rs 5 crore (Rs 50 million) executed through a single transaction on the stock exchanges is called a block deal.
The trading window is kept open for a limited period of 35 minutes from the beginning of trading hours and orders are placed at a price not exceeding 1 per cent over the ruling market price or the previous day's closing price, as applicable. The single-transaction window executes large trades without putting either the buyer or the seller in a disadvantageous position.
BSMA, the international equity investment arm of Bear Stearns, was the biggest seller at this window in the last two months, offloading 65.2 million equity shares of 37 companies worth Rs 396 crore (Rs 3.96 billion). The FII sold shares of Jaiprakash Associates, Shipping Corporation, Panyam Cements, Pennar Industries and Monnet Ispat to Mauritius-based FII Copthall Mauritius Investment.
Goldman Sachs Investments Mauritius was the second biggest seller at the block deal window, selling 17.3 million equity shares of eleven local companies, including Amtek Auto, Man Industries, Venus Remedies, HEG and Graphite India, amounting to Rs 75 crore (RS 750 million).
Citigroup Global Market Mauritius also sold 2.24 million equity shares of Aurobindo Pharma, Ahmednagar Forgings, Karnataka Bank and Entertainment Network to the tune of Rs 21 crore (Rs 210 million) through block deals in the last two months.
HSBC Bank Mauritius purchased a total of 8.59 million shares of six Indian companies -- HDFC, Godrej Consumer Products, Lanco Infratech, Varun Shipping, United Breweries and Temptation Foods -- for Rs 171 crore (Rs 1.71 billion), while Swiss Finance Corporation purchased 13.3 million shares of India Cement, IVRCL Infrastructure, Ruchi Soya, Gitanjali Gems and Aditya Birla Nuvo for Rs 155 crore (Rs 1.55 billion).
AIPS Global Deep Value, AIPS Global Deep Value Offshore and AIPS Capital together purchased 13.80 million equity shares amounting to Rs 56 crore (Rs 560 million) through block deals, while CLSA Mauritius bought 4.28 million equity shares of Apollo Hospitals from Small Capital World Fund for Rs 180 crore (Rs 1.8 billion) at an average market price of Rs 420 apiece on BSE.