Sebi may raise minimum block deal size, widen permissible price range

Discusses framework reform with exchanges, market participants

The Securities and Exchange Board of India (Sebi) is considering a fresh round of reforms to its block deal framework, with proposals to raise the minimum trade size and widen the permissible price range, according to people familiar with the matter. 

The markets regulator, according to the sources, is weighing an increase in the minimum block deal size to ₹25 crore, from the current ₹10 crore, in a bid to channel smaller trades towards the regular cash market. The existing threshold was set in 2017, when Sebi last carried out a major overhaul of the framework.’ 

Another significant change under discussion concerns the price band for block deals. At present, trades can be executed within a 1 per cent band on either side of the previous day’s closing price. Sebi is understood to be considering a wider band of up to 3 per cent for non-derivative stocks, while retaining the 1 per cent band for futures and options (F&O) scrips to reduce the risk of market manipulation. 

A separate dispensation is also being examined for SME-listed stocks, the sources said. 

The proposals were discussed at a recent meeting between the regulator, stock exchanges, and other market participants. Sebi had earlier constituted a working group to review the block deal framework. 

Emailed queries to the regulator remained unanswered until the time of going to press. 

Market experts said raising the minimum block deal size is a good step given that a ₹10 crore trade can be comfortably executed through the normal trading window. 

 

“The 1 per cent up/down price range from the previous day’s price was quite limiting. It prevented block discounts to market price as well as premiums. Now the 3 per cent range gives a little more flexibility to buyers and sellers to price a block,” said Kaushik Mukherjee, partner at IndusLaw. 

Mukherjee said retaining the existing band for F&O stocks was “a mindful move”, aimed at preventing manipulation through block deals that could create artificial demand to profit from F&O bets on the same stock or on indices whose volatility depends on the price of that stock.

 

Pranav Haldea, managing director of PRIME Database, said thresholds should be reviewed periodically, “preferably every five years, so they remain aligned with market growth.” He added that the block deal mechanism had provided comfort to foreign investors by allowing smoother exits.

 

Block deals remain an important avenue for large institutional trades. In 2025 so far, block deal transactions have aggregated around ₹1.32 trillion, with the highest monthly activity in June at ₹77,000 crore. Volumes in August have so far stood at around ₹4,300 crore.

 

Vivek Boray, partner at King Stubb & Kasiva, Advocates and Attorneys, cautioned that while the proposed framework could aid transparency and price discovery, it might reduce options for mid-sized investors. “The discussions reflect Sebi’s broader push to deepen liquidity in Indian markets,” he said.

 

Currently, exchanges operate two 15-minute block deal windows on all trading days -- from 8.45 am to 9.00 am, and from 2.05pm to 2.20pm. Orders in these windows must be placed within 1 per cent of the previous day’s closing price. The key advantage is that sellers are able to place shares directly with their preferred buyers. 

Block revamp 

*  Sebi may raise minimum block deal size to ₹25 crore from ₹10 crore

  *  Price band for non-derivative stocks may widen to 3% of previous day’s close

  *  1% band likely to continue for F&O stocks

  *  Separate rules under consideration for SME-listed stocks