Mergers and Acquisitions: A pre-post analysis for the Indian financial services sector

Sinha, Pankaj and Gupta, Sushant (2011): Mergers and Acquisitions: A pre-post analysis for the Indian financial services sector.

Abstract

This paper examines the Mergers & Acquisitions scenario of the Indian Financial Services Sector. The data for eighty cases of M&A in the period from March 1993- Feb 2010 is collected for a set of ten financial parameters representing the various characteristics of a firm. All the cases have been analyzed individually and collectively to determine the overall effects of M&A in the industry. The results of the study indicate that PAT and PBDITA have been positively affected after the merger but the liquidity condition represented by Current Ratio has deteriorated. Also Cost Efficiency and Interest Coverage have improved and deteriorated in equal number of cases. Interest Coverage remains an important factor in determining the return on shareholders’ funds both before and after the merger but Profit Margin also becomes important after the merger. And looking at the diversification effects of merger, in two out of the three cases there has been a reduction in total and systematic risk.

• Item Type: MPRA Paper
• Language: English
• Keywords: Mergers & Acquisitions,Financial Services Sector,liquidity
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C12 - Hypothesis Testing: General; G - Financial Economics > G2 - Financial Institutions and Services > G20 - General; C - Mathematical and Quantitative Methods > C0 - General > C01 - Econometrics; G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages

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