A bulk deal is a deal where the total quantity of shares bought or sold is greater than 0.5% of the share capital of the company. A bulk deal can be transacted either through the normal trading window or through the block trading window.
A block deal is defined as a single trade in which shares greater than 5,00,000 in number or more than Rs.5 crores in value are traded.
Why Bulk Deal and Block Deal data is important?
When it comes to buys and sells, the big players in the market are expected to know more than retail investors. Bulk/Block deals are usually done by institutional investors, mutual funds and high net worth individuals for a high transaction value and thus are expected to signal institutional moves to small investors.
As the participants of bulk/block deals are considered to be more informed about the opportunities and risks facing a company, the pricing and timing of these transactions may indicate where the investment interest is rising and where it is falling.
However, not all bulk deals may indicate long-term positions of the participants. There could be transactions which could be intra-day trades to gain from price movements, or deals where the stock is merely changing hands from one promoter entity to another. These transactions may or may not provide any long-term perspective on the company.
If you are an individual retail investor, a look at the bulk deals data will help you understand how the interest in the stock you own is changing, especially with the big investors. Bulk deals done on a continuous basis can to an extent give some indication on the direction of the stock price in the near future. But be cautious when using the data, because it may not be always indicative of a trend.
Insider trading is the buying or selling of a security by someone who has access to material nonpublic information about the security. Insider trading can be illegal or legal depending on when the insider makes the trade. It is illegal when the material information is still nonpublic. Legal insider trading happens when directors of the company purchase or sell shares, but they disclose their transactions legally. Insiders selling the stock in large quantities may indicate a negative flag.
SAST refers to Significant Acquisition of Shares and Takeovers. Equity shares give ownership rights of a company. More the number of shares one holds, the higher stake one will have in the entity. Meaning, the party will have a stronger say or control over the affairs and management of the business. However, minority shareholders (i.e. who do not exercise control over a company), might be at the risk of being suppressed. To protect the interest of minority shareholders, SEBI has mandated to declare the trades publicly which involve significant ownership transfers.
You can check out all these data for any stock on Signals feature within the Stocks & ETFs section on Niyo Money and take more informed decisions while buying/selling a stock.