Block trades in India are about to reach their highest point in the past 14 years as the nation's thriving stock market pushes investors to sell their holdings.
According to data collated by Bloomberg, shareholders have raised $7.1 billion so far this year by selling their interests in India. The current quarter is expected to have generated the most amount of money from block trades since the January to March 2010 period.
Over the past year, India's equities capital markets have been booming as the country's stocks reach all-time highs and foreign investors pour money into the market, shifting their focus from China, which has been experiencing a slowdown in its economy. After the country's general elections, which begin next month, more foreign inflows are probably going to occur, with the country's economic potential serving as a catalyst.
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With elections over, there could be another round of block trades or sell-downs. Domestic liquidity and foreign appetite remain very strong for Indian assets,” said Rahul Saraf, Citigroup’s India head of investment banking. The election results will be tallied on June 4.
With one of the world’s fastest rates of economic growth and relative political stability, Indian equities have soared, with the benchmark Sensex Index notching eight years of annual gains. The euphoria has prompted companies in India to go public at the fastest pace on record, as well as encouraging a continuous flow of additional share sales by listed firms since the start of the year.
There may be more sell-downs or block trading after the elections. Rahul Saraf, the head of investment banking for Citigroup in India, stated that there is still a lot of foreign and domestic demand for Indian assets. On June 4, the election results will be totaled.
Indian equities have surged, with the benchmark Sensex Index recording eight years of yearly increases. The country has one of the highest rates of economic growth in the world and relatively stable political conditions. In addition to driving the fastest-ever rate of IPOs in India, the excitement has also resulted in a steady stream of new share sales by listed companies since the year's beginning.
The surge in activity is in contrast to a slowdown in other Asian regions, such as China and Hong Kong, where sellers have been held back by a combination of lower values and problems with economic growth. According to data provided by Bloomberg, there hasn't been a block in mainland China or Hong Kong worth more than $500 million since July.
This week, Tata Sons Ltd. sold shares in its software services division, Tata Consultancy Services Ltd., to raise the equivalent of $1.1 billion. According to data provided by Bloomberg, this is the largest block involving shares of the software services unit since 2018.
In the largest block trade of Asia for 2024, British American Tobacco Plc raised about 175 billion rupees last week by selling a 3.5% stake in its Indian partner, ITC Ltd. That came when the co-founder of IndiGo, the largest airline in India, sold an inflated $820 million stake in the company, profiting as the stock got close to a record high.
