Asset sales by manufacturing firms in India

Vikash Gautam ()

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper we study 325 large scale asset sale transactions by Indian manufacturing firms in the period 1996 to 2008. We find that the likelihood of asset sales increases with the firm’s low capacity of debt utilisation and decreases with size, profitability, operating performance and solvency. We also find that the performance of firms after they sell assets do not improve in profitability, solvency or operations. The only difference the episodes of asset sales make is some reduction in leverage. We contrast with the existing episodes of asset sales in developed countries as the performance of firms there, after they sell assets, improves in all parameters.

Keywords: asset sales; focus; low capacity of debt utilisation; size; profitability; operating performance; solvency; leverage (search for similar items in EconPapers)
JEL-codes: D21 G31 G32 G33 (search for similar items in EconPapers)
Date: 2009-07, Revised 2009-12
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Related works:
Journal Article: Asset Sales by Manufacturing Firms in India (2012)
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