Merger & Acquisition in Indian banking Industry: An Event Study Approach

Journal Article

samontaray, Dr. Durga Prasad . 2013

• نوع عمل المنشور: Research
• رابط المنشور على الويب: Australian journal of basic and Applied Science (1991-8178, ISI Indexed Journal)
• رقم العدد: 11
• رقم الإصدار السنوي: 7, Sept 2013
• الصفحات: 252-262

مستخلص المنشور

In today’s globalised economy, mergers and acquisitions (M&A) are being increasingly
used the world over, for improving competitiveness of companies through gaining
greater market share, broadening the portfolio to reduce business risk, for entering new
markets and geographies, and capitalizing on economies of scale etc. In this paper we
have done the research in the field of Mergers and Acquisitions (M&As) in the Indian
banking sector. Using a sample of 20 M&As deals in the Indian banking industry
during the post-liberalization period 1993-2010, We analyze the impact of M&As on
the shareholders return (Average Abnormal Return) of the acquiring banks. For the
purpose of my study We used the Event study and checked the significance level. The
study has been done for Public & Private Banks, only Private banks, only Public Sector
banks (PSBs). We used the Simple T-Test, Paired Sample T-Test, Wilcoxon Sign Rank
Test. The findings of the project states that M&A as an event does generate Average
Abnormal Return (AAR) for acquirers (nearly 6.5%) for both the private and public
banks. It created 3.56% and 10.45% of CAARs for public and private banks
individually. As per the Simple T-Test there is some abnormal return to all investors
and more to private sector bank investors, whereas the Paired Sample T-Test and
Wilcoxon Sign Rank Test suggests there is abnormal return for all bank holders and
private bank holders but not to the public bank holders.