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Journal of Management Research and Analysis


Impact of merger and acquisition on Indian steel companies- A case study approach


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Author Details: Shrabanti Pal*

Volume : 5

Issue : 4

Online ISSN : 2394-2770

Print ISSN : 2394-2762

Article First Page : 455

Article End Page : 462


Abstract

The present paper is an endeavor to critically analyze the financial health of Indian steel companies during pre and post acquisition period. The study is also an endeavor to analysis the impact of acquisition on the acquirer company after such acquisition. Data are collected from audited balance sheet, profit and loss account of the concerned companies, CMIE data base, BSE and NSE and money control.com. To facilitate the study different types of ratios are selected and paired t-test is applied. The result showed that post acquisition liquidity, profitability, efficiency and cash flows of the selected companies’ decline in a significant way. Paired t-test is applied in the study at 0.05 significant levels to compare overall financial position of the selected companies during before and after acquisition. Financial ratios of whole sample show there is a significant deterioration in the mean of all selected ratios of acquirer companies. With a series of merger and acquisition taking place in Indian steel industry so far more than a half of the bidder firms demonstrated depressed financial performance in the post acquisition time as compared to pre acquisition period.

Keywords: Corporate reconstruction, Merger and acquisition, Paired t-test, Financial performance of Indian steel companies.

Doi :-https://doi.org/10.18231/2394-2770.2018.0074