IDFC First Bank Limited

A long-short strategy for 100 shares IDFC Ltd long and 155 shares IDFC First short.

The idea being to buy 100 shares of IDFC Ltd (long position) and simultaneously short 155 shares of IDFC first (short position). If the merger is successful in 9-12 months, its a 12-14% gain on the trade on which taxes are to be paid. If done with a couple of million in the above ratio, its a decent return.

Risks:
a) The merger does not go through (the long moves down and the short moves up dramatically)
b) limited upside on the trade
c) Taxes if STCG or LTCG depending on how long it takes.

Any thoughts or something that I’m missing here?

Regards
M