Adani Enterprises shares stable: Will arbitrage strategies work?

Pricing at a discount but shorting the stock ahead of the FPO won't be as straightforward

Shares of Adani Enterprises (AEL) were stable on Friday after crashing nearly 4 per cent on Thursday. The stock has declined more than 15 per cent in the past one month ahead of its Rs 20,000-crore follow-on public offering (FPO).

AEL on Wednesday set the price band for the FPO between 9 per cent and 13 per cent lower to that day’s closing price at Rs 3,112-Rs 3,276 per share. Retail investors—those applying for shares worth less than Rs 2 lakh—are getting an additional discount of Rs 64 per share.

Selling pressure during any kind of follow-on share