FY24 block deals bear ₹1.7 lakh crore, close to FY23 highs
It is raining block deals and FY24 is set to end with a sizeable total of ₹1.7 lakh crore ($20 billion) worth of transactions, but a few thousand crores short of the heights reached in FY23. Till the end of last week deals worth over ₹1.6 lakh crore had been transacted, compared to ₹1.9 lakh crore transacted in FY23, according to data provided to businessline by Prime Database and data on the exchanges.
In FY23 there were several large block deals in the stocks of the Adani group when the promoter family had sold small stakes four major Adani group companies in March to GQG Partners, which had boosted the block deal space. that year.
There are just three trading days this month in this truncated week, boxed in by holidays at the beginning and end.
Block deals trend
Block deals have risen over the years as this window has been increasingly used by promoters, private equity firms to sell large stakes or exit their holdings in India.
In FY20 block deals were just ₹52,264 crore, while the next year there was a dramatic increase in the deals to over ₹1.04 lakh crore. It was also the first full year of the pandemic and promoters, strapped for cash and wanting to clean up their balance sheets by reducing leverage, sold stakes in their companies. PE firms also took the opportunity to exit their holdings.
Over the next two years there was a steady increase in block deals reaching a peak last year. Calendar 2023 was in fact the year of block deals with transactions of $26 billion, up 62 per cent on year.
The exits have been fuelled by the extraordinary rally in the equity markets last year, which has been continuing this year too despite the periodic corrections.
Analysts are expecting more sell downs in 2024 with many private equity investments nearing maturity or time to monetise their investments.
March deals
March has seen a number of large deals through block trades.
One of the largest deals has been that of cigarette maker BAT Plc selling stake in its Indian subsidiary ITC for ₹17,485 crore. Two days prior to that Interglobe Aviation’s co-promoter Rakesh Gangwal sold stake in the airline for over ₹7800 crore. Two weeks ago Tata Sons sold under 1 per cent in Tata Consultancy Services for around ₹9000 crore.
Singtel sold stake in Bharti Airtel for ₹5849 crore. In December private equity firm and one of its oldest investors Warburg Pincus had sold stake in the telecom operator for ₹8302 crore.
The Nifty50 benchmark index has rallied over 30 per cent over a 12-month period, while the surge in the mid cap and small cap stocks has also encouraged exits.