FY24 block deals on a high at ₹1.7lakh crore

It is raining block deals and FY24 is set to end with a sizeable total of ₹1.7lakh 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 ₹1.6lakh crore had been transacted, compared with ₹1.9lakh crore transacted in FY23, according to data provided to businessline by Prime Database and data on the exchanges.

In the fiscal year 2023, several large block deals took place within the Adani Group stocks as the promoter family offloaded minor stakes in four major Adani Group companies to GQG Partners in March,    thereby expanding the block deal landscape.

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 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 periodic corrections.

MARCH DEALS

Analysts are expecting more selldowns in 2024 with many private equity investments nearing maturity or time to monetise their investments. 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 copromoter Rakesh Gangwal sold stake in the airline for over ₹7,800 crore. Two weeks ago, Tata Sons sold under 1 per cent in Tata Consultancy Services for around ₹9,000 crore.

Singtel sold stake in Bharti Airtel for ₹5,849 crore. In December, private equity firm and one of its oldest investors Warburg Pincus had sold stake in the telecom operator for ₹8,302 crore.

The Nifty50 benchmark index has rallied over 30 per cent over a 12month period, while the surge in the midcap and smallcap stocks has also encouraged exits.