The Securities and Exchange Board of India (SEBI) has issued a significant circular (SEBI/HO/MRD/POD-III/CIR/P/2025/134) on October 8, 2025, revising the Block Deal Framework across Indian stock exchanges. This move follows deliberations by the Secondary Market Advisory Committee (SMAC), recommendations from a dedicated Working Group, and feedback from public consultations. These changes aim to bring greater transparency, efficiency, and flexibility to large institutional trades in the equity markets.
What is a Block Deal?
A block deal refers to the execution of large trades—typically involving shares worth a minimum of ₹25 crores—between two parties in a single transaction. These trades are usually negotiated privately and carried out through a separate trading window to avoid disrupting market prices.
What Has Changed?
SEBI’s updated framework, which modifies provisions from earlier circulars dated December 10 and December 30, 2024, introduces a more structured approach to block deals. Here are the major updates:
1. Two Dedicated Block Deal Windows
SEBI now mandates two time slots during the trading day for executing block deals:
- Morning Window:
⏰ 08:45 AM – 09:00 AM
📈 Reference Price: Previous day’s closing price
✅ Ideal for institutional investors looking to strike early deals without market disruption. - Afternoon Window:
⏰ 02:05 PM – 02:20 PM
📊 Reference Price: Volume Weighted Average Price (VWAP) of trades between 01:45 PM – 02:00 PM
📡 Exchanges will publish the VWAP between 02:00 PM – 02:05 PM before this window opens.
2. Price Range Limitation
Orders placed during these windows must be within a ±3% range of the applicable reference price. This restriction ensures price stability and guards against manipulation.
3. Minimum Order Size and Settlement
The minimum order size for block deals has been fixed at ₹25 crores, and:
- Every trade must result in delivery—no squaring off or reversing of trades is allowed.
- These trades are also allowed under the optional T+0 settlement cycle, in addition to the standard T+1 cycle.
4. Increased Transparency
To improve market transparency:
- Stock exchanges will disclose all block deal data—including scrip name, client identity, quantity, and traded price—after market hours on the same day.
Implications for Market Participant
This revised framework offers greater predictability and confidence for large institutional investors, enabling them to execute sizable trades without creating market volatility. By including the T+0 settlement option, SEBI is aligning with its broader push toward faster settlements and operational efficiency in capital markets.
Retail investors also benefit indirectly from this reform, as the structured block deal windows and improved transparency reduce the risk of abrupt price swings during regular market hours.
Conclusion
SEBI’s updated block deal guidelines are a step forward in strengthening the institutional trading ecosystem in India. With clearer execution windows, tighter pricing norms, and mandatory disclosure of trades, the new framework balances the needs of large traders with the principles of fair and efficient markets.
As India’s capital markets continue to evolve, these reforms highlight SEBI’s commitment to making them more robust, transparent, and globally competitive.