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

Pankaj Sinha and Sushant Gupta

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Mergers & Acquisitions; Financial Services Sector; liquidity (search for similar items in EconPapers)
JEL-codes: C01 C12 G20 G21 (search for similar items in EconPapers)
Date: 2011-04-10
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Citations: View citations in EconPapers (4)

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