Capf is merged with idfc, why this type situation happens when merging of two companies is there.
idfcbank and capf both rose 20-25% since that hint, now market facing profit booking
This is a classic case of “Buy on Rumor, Sell on News” pattern where traders would buy stock (s) where major news (like merger, fund raising etc.) is anticipated and try to ride the momentum as much as possible till the news comes out. When the news becomes official, the traders (who are now sitting on sizeable profit) decide to take profit off the table by selling. This heavy selling causes the prices to drop.
A lot of newcomers get hurt trying to buy after the news is out without realising how dangerous it can get. So, the lesson is to stay ahead of the curve in cases like these.
Moreover, IDFC Bank is a mediocre bank at best and merger with CAPF will not change its fortune overnight. So. the price action it saw was bound to get halted sooner than later.