We have an unhappy bunch of equity traders sitting upstairs
Fears of stock manipulation explain India’s strict rules for bulk tradingPremium
Andy Mukherjee
Share Via
Read Full Story
As all institutional investors know, purchasing shares in bulk can be a real pain in India. Traders at a biggish asset management firm would be lucky to fill even a fifth of the entire demand from individual funds. The rest will become a feast for unrelated buyers. It’s a design quirk, which grew out of a misplaced egalitarian sensibility and a fear of mischief by business families.
The idiosyncrasy is not without its costs. Imagine what would happen if a Nike store owner tried to accommodate a wholesale buyer inside a packed retail showroom by shouting to everyone that the next 15,000 pairs come at a 15% discount. There would be a stampede. Other customers could rush to the cash register first, the shop might run out of shoes, and bulk buyers would go home disappointed.