A Study on the Growth Policies and Profitability's of Select Mergers and Acquisitions in India A. R. Sindhu, S. Madhavan AMET International Journal of Management ISSN 2231-6779 July – Dec 2016 Vol. 10, pp. 42-68 AMET International Journal of Management 42 ISSN 2231-6779 / July – Dec 2016 A STUDY ON THE GROWTH POLICIES AND PROFITABILITY'S OF SELECT MERGERS AND ACQUISITIONS IN INDIA A R Sindhu Dr. S. Madhavan Abstract The study aims to investigate the growth percentage in Earning per Share, Net worth, Debt equity Ratio and Market value of companies starting from Jan 2014 to March 2014, which is carried out on a sample of 22 companies, who under vent M&A. It is assumed that Merger and Acquisition (M&A) develop the company financial performance, organisational competitiveness and it is an easier way to internationalisation also. 2014 was a year for very strong foreign investor interest in India, while the economic and growth sentiments are enormously positive. The present research paper was based on Secondary data from the CMIE's Prowess database and Annual Reports of the companies concerned. Finally from the results it is concluded that mergers have a significant change in enhancing the profitability of acquirer companies. Keywords: Mergers and Acquisitions, Earning Per Share, Debt Equity Ratio, Networth and Market value of company Introduction Corporate Restructuring is the procedure required in changing the association of a business. Corporate rebuilding can include rolling out emotional improvements to a business by removing or consolidating divisions that frequently has the impact of dislodging staff individuals. In today's globalized economy, Mergers and Acquisitions are by and large progressively utilized as a target for speedier development in piece of the pie, accomplishing a bigger size, to improve gainfulness, resource base, and broadening of hazard and for turning out to be more focused through economies of scale. Each merger has its own particular novel reasons as the consolidating of two organizations is a decent business choice. As the term Merger implies converging of two organizations where one new organization will keep on existing. Reverse mergers (also known as a reverse takeover or reverse IPO) are a very popular in Merger. A reverse merger is a way for private companies to go public, typically Growth policies and profitability's..... A R Sindhu & Dr. S. Madhavan AMET International Journal of Management 43 ISSN 2231-6779 / July – Dec 2016 through a simpler, shorter, and less expensive process. Mergers can be categorized as follows Horizontal Merger, Vertical Merger and Conglomerate Merger. The Merger and Acquisition Process can be separated into five stages, they are: Table 1: Merger & Acquisition Phases Phases Process Phase 1 Pre Acquisition Review Phase 2 Search & Screen Targets Phase 3 Investigate & Value the Target Phase 4 Acquire through Negotiation Phase 5 Post Merger Integration. An Overview of M&A in 2014 As indicated by the information discharged by Grant Thornton India, an Accounting and Consulting firm, as the aggregate Merger and Acquisitions (M&A) bargains amid the year 2014 were esteemed at US$ 38 billion (573 arrangements) when contrasted with US$ 28.19 billion (500 arrangements) amid the comparing time frame in 2013. As 2013 M&A demonstrated an exceptionally baffling business sector, the raise of 2014 was astounding with a full speed of Mega arrangements in the main quarter itself. M&A movement in 2014 relies on upon various elements, which incorporates Economic Conditions, Private Equity Impact, Venture Capital Pipeline and Intellectual Property Motivations. The main 5 M&A segments in the year 2014 were distinguished as Pharmaceuticals, Healthcare and Biotechnology, Telecommunication, Transport and Logistics, Retail and Consumer and Energy and Natural Resources. Growth policies and profitability's..... A R Sindhu & Dr. S. Madhavan AMET International Journal of Management 44 ISSN 2231-6779 / July – Dec 2016 Table 2: 2014 Overall M&A Year Deal Summary Total Domestic Cross-border Merger and Internal Restructuring Inbound Outbound 2 0 1 4 Value (US$ mn) 16,316 11,829 5,981 3,989 38,115 Volume 253 166 117 37 573 2 0 1 3 Value (US$ mn) 5,636 8,736 9,249 4,541 28,162 Volume 217 139 82 58 497 Source : Grand Thornton Deal tracker 2014 Why Companies Acquire? The Indian market is substantial, assorted and complex and for global organizations assessing a passage, it is basic to have a home-developed admonitory group that comprehends the market, appreciates close associations with chiefs in organizations, can oversee singular promoter sensitivities, and in addition comprehends the subtleties of Indian controls. Such an affiliation would help organizations explore the social, political, administrative and legitimate systems easily. While India is among the most remunerating spots to work together in, it accompanies its own arrangement of interesting difficulties. There are a few experiences from the point of view of an inbound acquirer and practices why an organization mostly go for a get, a portion of the real reasons are because of Growth policies and profitability's..... A R Sindhu & Dr. S. Madhavan AMET International Journal of Management 45 ISSN 2231-6779 / July – Dec 2016 enhanced market get to, consolidated business creation, co-ordinated Strategies, shared know-how, vertical incorporation and shared unmistakable assets. Table 3: Deal activity by industry Target vertical 2013 2014 Deal volume Deal value (US$ million) Deal volume Deal value (US$ million) Cement and building products 16 992 20 1,147 Chemicals 30 415 30 290 Diversified Industrial Products 79 399 78 1,244 Financial services 56 1,342 55 3,751 Health care 26 663 34 295 Pharmaceuticals 32 3,717 52 4,159 Metals and mining 35 446 26 676 Media and entertainment 51 83 53 1,094 Infrastructure 73 1,983 94 5,829 Professional services 29 487 45 108 Real estate 24 639 32 1,331 Retail and consumer products 73 3,843 96 4,010 Technology 71 544 116 2,021 Source: EV analysis of Thomson ONE data Reasons for M & A: One very important reason for M&A is Synergy value element. The joining or merging of the two companies creates an additional value called Synergy Value, to make it simple 2 + 2 = 5. Synergy value can take three forms Revenues, Expenses, Cost of Capital. If the expected synergy values may not be realized, the merger is considered to be a failure. Some of the reasons behind failed mergers are Poor Growth policies and profitability's..... A R Sindhu & Dr. S. Madhavan AMET International Journal of Management 46 ISSN 2231-6779 / July – Dec 2016 strategic fit, Cultural and Social Differences Incomplete and Inadequate Due Diligence, Poorly Managed Integration, Paying too Much, Overly Optimistic. Brief Literature Survey: Table 4: Studies on M&A in India – A Brief Literature Survey Title Study by Period Objectives/Tools/Findings 1.Impact of Mergers on Corporate Performance in India Amarjit Saini & Dr.Ravi Singla 2015 Obj: To analyze the impact of M&A on the financial performance of acquirer companies and to examine the instantaneous impact of M&A on acquirer companies Shareholders wealth. Tools: Ratios, T-test, Z-test, Event Window Fin: The acquirer companies have not observed any significant impact on their Liquidity and Profitability Position. 2.Impact of Mergers & Acquisitions on Firms' Long Term Performance: A Pre & Post Analysis of the Indian Telecom Industry Neha Verma, Dr. Rahul Sharma 2014 Obj: To analyze the impact and to identify M&A induced changes of select financial and operating performance variables on Return on Shareholder's Fund (ROSF) of the companies and synergies, if any, resulting from M&A's in the Indian Telecom Sector during the period 200102 to 2007-08. Tools: Financial & Operating Performance Variables, t-test Fin: Managers must retain focus on firm's business, particularly, postM &A integration process to achieve the real objectives of the M&A. Obj: To analyse the Trends of M&A Growth policies and profitability's..... A R Sindhu & Dr. S. Madhavan AMET International Journal of Management 47 ISSN 2231-6779 / July – Dec 2016 3.Mergers & Acquisitions in India: A sectoral analysis Priya Bhalla 2014 in various Sectors with special focus on Indian Financial Sector and to investigate the differential representation of various sectors in M&A. Fin: From the study it is observed that Pharmaceutical, Telecom and Financial Sectors have witnessed most fundamental reforms and India is lagging behind other advanced and emerging economies in terms of number and value of M&A. 4.Impact of M&A on Operating Performance: Evidence from Manufacturing Firms in India Ramachandran Azhagaiah & Thangavelu Sathishkumar 2014 Obj: To analyse the effect of M&A on the attributes of Operating Performance Vs Gross Earnings, Liquidity, Financial Risk, Cost of Utilisation , Turnover, Growth and Operating Leverage and to study shift-in-structure in the Operating Performance for post merger period of acquiring manufacturing firms of India Tool: Factor Analysis, Correlation Matrix, Multiple Regression Analysis and Chow test Fin: The M&A process has significant effect on OP of acquiring Manufacturing firms of India After M&A. 5.M&A: An Empirical study on the Post Merger performance of selected Corporate Firms Rosy Kalra 2013 Obj: To study the impact of M&A on the Operating Performance, Liquidity, Profitability and Leverage of merged/acquirer by considering 3 years (April 08-March 09) on evaluating Pre and Post merger process of selected companies. Tool: Financial Ratio, T-test Fin: The result of the study shows Growth policies and profitability's..... A R Sindhu & Dr. S. Madhavan AMET International Journal of Management 48 ISSN 2231-6779 / July – Dec 2016 in India that M&A have a significant impact on the L, P, and OP, moreover the management cannot take it for granted that synergy will be generated and profits will increase simply by going for M&A. 6.M&A: A growth perspective from India Prof. Babasaheb. R. Jadhav , Dr.D.B.Bharati 2013 Obj: To examine the strategies of M&A in India from growth prospective and cause & effect analysis and to study the FDI in M&A deals. Tool: Line chart, Bar Diagram, Percentage and Proportions. Fin: FDI in acquisition is double than the merger and there are lot of disparities between deals and values of acquisition is more in total M&A. 7.Determinants of M&A of firms in the Indian Financial Sector: An Empirical Analysis Priya Bhalla 2011 Obj: To investigate the motives of 288 entities belonging to Financial Services Sector of India for the period 1997-98 to2007-08 Tool: CAMEL rating system, Correlation, Logit–probit analysis. Fin: It supports the 'market for control' hypothesis and one of the motives for acquiring other firms in the Financial Sector may be to obtain greater Liquidity and Diversification in Operations. 8.M&A – "A change paradigm in performance of Indian company Prof. Natika Jain & Prof.Sulbha Raorane 2011 Obj: To analysis the impact of M&A on the Performance of the selected companies in Indian context. Tool: Ratio analysis & T-test Fin: The acquirer companies always benefited more than the targeted companies in the merger event. Growth policies and profitability's..... A R Sindhu & Dr. S. Madhavan AMET International Journal of Management 49 ISSN 2231-6779 / July – Dec 2016 9.Mergers in Indian Industry: performance and impacting factors. K. Ramakrishnan 2010 Obj: Long-term post-merger firm performance measurement. To analyses of the impact of the strategic factors on long-term postmerger firm performance. Tool: cross-sectional linear regression model, paired-samples ttest Fin: Unrelated mergers appear to be performing better in the long term, contrary to strategic management theory. 10.Type of Merger and Impact on Operating Performance: The Indian Experience Pramod Mantravadi & A Vidyadhar Reddy 2008 Obj: To analyse Post-merger Operating Performance for acquiring firms in India which are involved in different types of mergers. Tool: Ratio Analysis Fin: It is suggested that Horizontal merger had caused the highest decline in the OP of merging companies. 11.Relative size in Mergers and Operating Performance: Indian Experience Pramod Mantravadi & A Vidyadhar Reddy 2007 Obj: Analysing the Post-merger Operating Performance for acquiring firms in Industry during Post-reform period. Tool: Ratio Analysis, Paired t-test Fin: The analysis of Pre and Post merger OP ratios for the acquiring firms in the sample seems to indicate the relative size does make some difference to the Post-merger OP of acquiring firms. 12.Post-merger corporate performance: an Indian perspective Raj Kumar 2009 Obj: To measure pre-merger sizeand industry-adjusted performance of the acquiring and acquired companies, combined into one measure and post merger operating performance of the Growth policies and profitability's..... A R Sindhu & Dr. S. Madhavan AMET International Journal of Management 50 ISSN 2231-6779 / July – Dec 2016 survived entity. And To identify merger-induced changes in operating performance of companies and synergies, if any, resulting from mergers. Tool: ROCE, ASTR, Debt-equity ratio, paired t-test Fin: It is found that the postmerger profitability, assets turnover and solvency of the acquiring companies, on average, show no improvement when compared with pre-merger values. So it seems that, contrary to common beliefs and expectations, mergers usually do not lead to improve the acquirer's financial performance. Major findings from reviews: The common finding that can be drawn from the above research studies was that various analysis were made in the area of operating performance of acquiring firms in different industries only. As per the analysis made in operating performance, it was noted that there was a significant effect on acquiring firms while going for M&A. There were only few studies made under sector wise and the types of mergers. The main important point of the acquirer companies was that the targeted companies were always benefited more in the M&A event. Research Gap Most of the studies were based on the yearly data focusing on the impact of Operating Performance of acquiring firms using various attributes such as Liquidity, Profitability and Leverage. However, very little number of study were made on the growth attribute showing whether there was a decline or growth in Pre and Post M&A from the above reviews. So the researcher has focused on calculating the growth percentage on Pre and Post M&A. Growth policies and profitability's..... A R Sindhu & Dr. S. Madhavan AMET International Journal of Management 51 ISSN 2231-6779 / July – Dec 2016 Research Methodology: Objectives  To analyse the growth percentage of M&As on various attributes like Earnings Per Share, Net Worth, Debt Equity Ratio and Market Value of Company to consider Investment Opportunities. Data collection and Methodology Descriptive research design is used and Convenience Sampling has been employed to select the sample companies. The data were collected from 2014 period announced Merged and Acquired companies during 3 months (January, February and March 2014) in which a sample of 22 selected companies are taken for the study. The announced Merged and Acquired companies were taken from the Centre for Monitoring Indian Economy (CMIE) Prowess database. The study was mainly based on secondary data, which were also from companies Annual Reports, UNCTAD cross-border M&A database 2013 & 2014, BSE website, Grand Thornton Dealtracker 2014 and from various other reports, journals and books. Analysis and Interpretation 5.Table – Calculation on Growth percentage on Earnings Per Share of M&A firms: S l. N o A cq u ir e r D e a l T y p e S e ct o r T a rg e t C o m p a n y E v e n t D a te Earnings Per Share B e fo re M e rg e r (1 3 -1 4 ) A ft e r M e rg e r (1 4 -1 5 ) E P S G ro w th in % G ro w th /D e cl in e January 1 Sunteck Realty Ltd. Merger Real estate Marico Kaya Enterprises Ltd. 15-Jan-14 21.81 11.86 -45.62 Decline Growth policies and profitability's..... A R Sindhu & Dr. S. Madhavan AMET International Journal of Management 52 ISSN 2231-6779 / July – Dec 2016 2 Avonmore Capital & Mgmt. Services Ltd. A cq u is it io n o f sh a re s Financial Services providers Almondz Insurance Brokers Pvt. Ltd. 06-Jan-14 1.46 0.12 -0.92 Decline 3 Future Lifestyle Fashions Ltd. Lifestyle Fashions Resource World Exim Pvt. Ltd. 03-Jan-14 1.07 1.51 0.41 Growth 4 L & T Technology Services Ltd. IT Newtime Infrastructure Ltd. 14-Jan-14 54.46 59.36 8.99 Growth 5 Oil India Ltd. Petroleum and Natural Gas. Videocon Mozambique Rovuma 1 Ltd. 07-Jan-14 41.76 49.59 18.75 Growth February 1 Relish Pharmaceuti cals Ltd. Merger Pharmace uticals Divine Heritage Hotels Pvt. Ltd. 11-Feb-14 0.84 -4.91 -684.52 Decline 2 P V R Ltd. Cinemas Divine Heritage Hotels Pvt. Ltd. 14-Feb-14 3.3 14.16 329.09 Growth 3 Lumax D K Auto Inds.Ltd. Automobil e Marico Kaya Enterprises Ltd. 27-Feb-14 11.02 23.51 113.34 Growth 4 Lupin Ltd. A cq u is it io n o f sh a re s Pharmace utical Adani Transmission (India) Ltd. 03-Feb-14 53.54 40.99 -23.44 Decline 5 Lupin Ltd. Pharmace utical Nanomi B V 03-Feb-14 53.54 40.99 -23.44 Decline 6 Tata Power Renewable Energy Ltd. Power M M S Infrastructure Ltd. 25-Feb-14 0.19 0.46 142.11 Growth 7 I T C Ltd. Edible Oils Oasis Tradelink Ltd. 06-Feb-14 12.05 11.09 -7.97 Decline 8 Omaxe Ltd. Builders P P Devcon Pvt. Ltd. 07-Feb-14 2.18 3.3 51.38 Growth March 1 Ravindra Energy Ltd. Merger Power Shree Renuka Energy Ltd. [Merged] 18-Mar-14 0.03 0.02 -33.33 Decline 2 Ashok Leyland Ltd. Automobil e Divine Heritage Hotels Pvt. Ltd. 27-Mar-14 1.2 0.11 -90.83 Decline 3 Power Grid Corpn. Of India Ltd. A cq u is it i o n o f sh a re s Power Unchahar Transmission Ltd. 24-Mar-14 9.52 9.36 -1.68 Decline Growth policies and profitability's..... A R Sindhu & Dr. S. Madhavan AMET International Journal of Management 53 ISSN 2231-6779 / July – Dec 2016 4 Oil India Ltd. Petroleum and Natural Gas. Indian Oil Corpn. Ltd. 14-Mar-14 41.76 49.59 18.75 Growth 5 R P P Infra Projects Ltd. Infrastruct ure Greatful Mercantile Pvt. Ltd. 28-Mar-14 7.64 5.17 -32.33 Decline 6 R P P Infra Projects Ltd. Infrastruct ure Birdhi Chand Pannalal Agencies Ltd. 28-Mar-14 7.64 5.17 -32.33 Decline 7 Sterlite Grid Ltd. Telecom & Power Ltd. Rapp Transmission Co. Ltd. 12-Mar-14 2.14 1.28 -40.19 Decline 8 Surana Telecom & Power Ltd. Telecom & Power Ltd. Surana Solar Systems Pvt. Ltd. 21-Mar-14 0.19 0.07 -63.16 Decline 9 U P L Ltd. Chemical U P L Do Brasil Industria E Comercio De Insumos Agropecuarios S A 04-Mar-14 10.81 9.45 -12.58 Decline Source: From Annual Report with Authors' calculation Growth policies and profitability's..... A R Sindhu & Dr. S. Madhavan AMET International Journal of Management 54 ISSN 2231-6779 / July – Dec 2016 Interpretation: The above table shows that the EPS calculations of 5 M&A firms for the month of January 2014 show a major growth perspective transaction over Merging and Acquiring firms. In the month of February 2014, the 8 acquiring firms show a growth as well as decline perspective value. For the month of March 2014, the 9 acquiring firms shows a major decline over the transaction made on Merging and Acquiring. It reveals that the EPS growth percentage calculation shows a common decline trend in the Q1of 2014. -800 -600 -400 -200 0 200 400 EPS for the study period January to March EPS Growth policies and profitability's..... A R Sindhu & Dr. S. Madhavan AMET International Journal of Management 55 ISSN 2231-6779 / July – Dec 2016 6. Table showing NETWORTH calculation: S l N o A cq u ir e r D e a l T y p e S e ct o r T a rg e t C o m p a n y E v e n t D a te NETWORTH BM (Rs.in Crore) AM(Rs. In Crore) Networth Growth in % Growth /Decline January 1 Sunteck Realty Ltd. Merger Real estate Marico Kaya Enterprises Ltd. 15Jan14 1470.28 2 547.747 168.42 Growth 2 Avonmore Capital & Mgmt. Services Ltd. A cq u is it io n o f sh a re s Financial Services providers Almondz Insurance Brokers Pvt. Ltd. 06Jan14 69.46 58.54 18.66 Growth 3 Future Lifestyle Fashions Ltd. Lifestyle Fashions Resource World Exim Pvt. Ltd. 03Jan14 1,569.7 2 1,291.32 21.56 Growth 4 L & T Technology Services Ltd. IT Newtime Infrastructure Ltd. 14Jan14 37,084. 6 33,661.8 10.17 Growth 5 Oil India Ltd. Petroleum and Natural Gas. Videocon Mozambique Rovuma 1 Ltd. 07Jan14 21,514. 31 20,708.1 8 3.89 Growth February 1 Relish Pharmaceutical s Ltd. Merger Pharmaceuti cals Divine Heritage Hotels Pvt. Ltd. 11Feb14 13.954 13.823 0.95 Growth 2 P V R Ltd. Cinemas Divine Heritage Hotels Pvt. Ltd. 14Feb14 3,983.7 3,912.7 1.81 Growth 3 Lumax D K Auto Inds. Ltd. Automobile Marico Kaya Enterprises Ltd. 27Feb14 123.792 103.366 19.76 Growth 4 Lupin Ltd. A cq u is it io n o f sh a re s Pharmaceuti cal Adani Transmission (India) Ltd. 03Feb14 8,874.0 6 6,931.57 28.02 Growth 5 Lupin Ltd. Pharmaceuti cal Nanomi B V 03Feb14 8,874.0 6 6,931.57 28.02 Growth 6 Tata Power Renewable Energy Ltd. Power M M S Infrastructure Ltd. 25Feb14 500.307 201.416 148.39 Growth 7 I T C Ltd. Edible Oils Oasis Tradelink Ltd. 06Feb14 30735.6 9 26262.02 17.03 Growth Growth policies and profitability's..... A R Sindhu & Dr. S. Madhavan AMET International Journal of Management 56 ISSN 2231-6779 / July – Dec 2016 8 Omaxe Ltd. Builders P P Devcon Pvt. Ltd. 07Feb14 1,911.6 1 1,882.95 1.52 Growth March 1 Ravindra Energy Ltd. Merger Power Shree Renuka Energy Ltd. [Merged] 18Mar14 204.121 203.052 0.53 Growth 2 Ashok Leyland Ltd. Automobile Divine Heritage Hotels Pvt. Ltd. 27Mar14 5,118.7 0 4,447.89 15.08 Growth 3 Power Grid Corpn. Of India Ltd. A cq u is it io n o f sh a re s Power Unchahar Transmission Ltd. 24Mar14 38166.5 9 34459.63 10.76 Growth 4 Oil India Ltd. Petroleum and Natural Gas. Indian Oil Corpn. Ltd. 14Mar14 21514.3 1 20708.18 3.89 Growth 5 R P P Infra Projects Ltd. Infrastructu re Greatful Mercantile Pvt. Ltd. 28Mar14 135.85 119.97 13.24 Growth 6 R P P Infra Projects Ltd. Infrastructu re Birdhi Chand Pannalal Agencies Ltd. 28Mar14 135.85 119.97 13.24 Growth 7 Sterlite Grid Ltd. Telecom & Power Ltd. Rapp Transmission Co. Ltd. 12Mar14 1,242.6 5 1,218.29 1.99 Growth 8 Surana Telecom & Power Ltd. Telecom & Power Ltd. Surana Solar Systems Pvt. Ltd. 21Mar14 59.814 60.136 -0.53 Decline 9 U P L Ltd. Chemical U P L Do Brasil Industria E Comercio De Insumos Agropecuario s S A 04Mar14 3,524.0 8 3,308 6.54 Growth Source: From Annual Report with Authors' calculation Growth policies and profitability's..... A R Sindhu & Dr. S. Madhavan AMET International Journal of Management 57 ISSN 2231-6779 / July – Dec 2016 Interpretation: The above table reveals that for 3months NETWORTH calculations, which have a major growth perspective in common over Merging and Acquiring firms. In the month of March 2014, only one transaction has hit decline. It reveals that the NETWORTH shows a growth stage over the transaction made in the 3 consecutive months of 2014. -20 0 20 40 60 80 100 120 140 160 180 Networth for the study period January to March Networth Growth policies and profitability's..... A R Sindhu & Dr. S. Madhavan AMET International Journal of Management 58 ISSN 2231-6779 / July – Dec 2016 7. Table showing DEBT EQUITY RATIO calculation: S l N o A cq u ir e r D e a l T y p e S e ct o r T a rg e t C o m p a n y E v e n t D a te DEBT EQUITY RATIO BM (Rs.in Crore) AM(Rs. In Crore) Debt Equity Growt h in % Growt h /Declin e January 1 Sunteck Realty Ltd. Merger Real estate Marico Kaya Enterprises Ltd. 15Jan -14 2257.38 3 1155.55 95.35 Growt h 2 Avonmore Capital & Mgmt. Services Ltd. Acquisiti on of shares Financial Services providers Almondz Insurance Brokers Pvt. Ltd. 06Jan -14 139.263 118.832 17.19 Growt h 3 Future Lifestyle Fashions Ltd. Lifestyle Fashions Resource World Exim Pvt. Ltd. 03Jan -14 5518.59 5231.65 5.48 Growt h 4 L & T Technology Services Ltd. IT Newtime Infrastructu re Ltd. 14Jan -14 123988. 4 111966. 4 10.74 Growt h 5 Oil India Ltd. Petroleum and Natural Gas. Videocon Mozambiqu e Rovuma 1 Ltd. 07Jan -14 57741.4 3 55582.6 3 3.88 Growt h February 1 Relish Pharmaceutic als Ltd. Merger Pharmaceutic als Divine Heritage Hotels Pvt. Ltd. 11Feb -14 32.265 32.065 0.62 Growt h 2 P V R Ltd. Cinemas Divine Heritage Hotels Pvt. Ltd. 14Feb -14 1763.04 1621.58 8.72 Growt h 3 Lumax D K Auto Inds. Ltd. Automobile Marico Kaya Enterprises Ltd. 27Feb -14 605.048 576.792 4.89 Growt h 4 Lupin Ltd. Pharmaceutic al Adani Transmissio n (India) Ltd. 03Feb -14 22011.8 17137.6 28.44 Growt h Growth policies and profitability's..... A R Sindhu & Dr. S. Madhavan AMET International Journal of Management 59 ISSN 2231-6779 / July – Dec 2016 5 Lupin Ltd. Acquisiti on of shares Pharmaceutic al Nanomi B V 03Feb -14 22011.8 17137.6 28.44 Growt h 6 Tata Power Renewable Energy Ltd. Power M M S Infrastructu re Ltd. 25Feb -14 1867.37 6 1375.65 9 35.74 Growt h 7 I T C Ltd. Edible Oils Oasis Tradelink Ltd. 06Feb -14 74931.3 5 65491.4 1 14.41 Growt h 8 Omaxe Ltd. Builders P P Devcon Pvt. Ltd. 07Feb -14 6871.93 6 6708.83 9 2.43 Growt h March 1 Ravindra Energy Ltd. Merger Power Shree Renuka Energy Ltd. [Merged] 18Mar -14 542.699 539.253 0.64 Growt h 2 Ashok Leyland Ltd. Automobile Divine Heritage Hotels Pvt. Ltd. 27Mar -14 18430.1 9 17255.8 86 6.8 Growt h 3 Power Grid Corpn. Of India Ltd. Acquisiti on of shares Power Unchahar Transmissio n Ltd. 24Mar -14 196467. 47 174048. 7 12.88 Growt h 4 Oil India Ltd. Petroleum and Natural Gas. Indian Oil Corpn. Ltd. 14Mar -14 57741.4 3 55582.6 3 3.88 Growt h 5 R P P Infra Projects Ltd. Infrastructure Greatful Mercantile Pvt. Ltd. 28Mar -14 521.72 396.05 31.73 Growt h 6 R P P Infra Projects Ltd. Infrastructure Birdhi Chand Pannalal Agencies Ltd. 28Mar -14 521.72 396.05 31.73 Growt h 7 Sterlite Grid Ltd. Telecom & Power Ltd. Rapp Transmissio 12Mar 5469.96 4764.61 14.8 Growt h Growth policies and profitability's..... A R Sindhu & Dr. S. Madhavan AMET International Journal of Management 60 ISSN 2231-6779 / July – Dec 2016 n Co. Ltd. -14 8 Surana Telecom & Power Ltd. Telecom & Power Ltd. Surana Solar Systems Pvt. Ltd. 21Mar -14 154.842 156.444 -1.02 Declin e 9 U P L Ltd. Chemical U P L Do Brasil Industria E Comercio De Insumos Agropecuari os S A 04Mar -14 11163.3 9 10390.1 6 7.44 Growt h Source: From Annual Report with Authors' calculation -20 0 20 40 60 80 100 120 Su n te ck R e al ty L td . A vo n m o re C ap it al & M gm t. ... Fu tu re L if es ty le F as h io n s Lt d . L & T T ec h n o lo gy S er vi ce s Lt d . O il In d ia L td . R e lis h P h ar m ac eu ti ca ls L td . P V R L td . Lu m ax D K A u to In d s. L td . Lu p in L td . Lu p in L td . Ta ta P o w er R e n ew ab le ... I T C L td . O m ax e Lt d . R av in d ra E n er gy L td . A sh o k Le yl an d L td . P o w er G ri d C o rp n . O f In d ia ... O il In d ia L td . R P P In fr a P ro je ct s Lt d . R P P In fr a P ro je ct s Lt d . St e rl it e G ri d L td . Su ra n a Te le co m & P o w e r Lt d . U P L L td . Debt Equity Ratio for the study period January to March Debt Equity Growth policies and profitability's..... A R Sindhu & Dr. S. Madhavan AMET International Journal of Management 61 ISSN 2231-6779 / July – Dec 2016 Interpretation: From the above table, we can infer that except for one transaction in the entire study period, all other company's Debt Equity Ratios have shown a growing/increasing trend. 8. Table showing MARKET VALUE OF COMPANY calculation: S l N o A cq u ir e r D e a l T y p e S e ct o r T a rg e t C o m p a n y E v e n t D a te MARKET VALUE OF COMPANY BM (Rs.in Crore) AM(Rs. In Crore) Growth in % Growth /Decline January 1 Sunteck Realty Ltd. Merger Real estate Marico Kaya Enterprises Ltd. 15Jan14 1960.70 1696.55 -13.47 Decline 2 Avonmore Capital & Mgmt. Services Ltd. Acquisition of shares Financial Services providers Almondz Insurance Brokers Pvt. Ltd. 06Jan14 39.13 48.42 23.75 Growth 3 Future Lifestyle Fashions Ltd. Acquisition of shares Lifestyle Fashions Resource World Exim Pvt. Ltd. 03Jan14 2.02 2.09 3.62 Growth 4 L & T Technology Services Ltd. IT Newtime Infrastructu re Ltd. 14Jan14 99547.9 9 92719.88 -6.86 Decline 5 Oil India Ltd. Petroleum and Natural Gas. Videocon Mozambiqu e Rovuma 1 Ltd. 07Jan14 28211.8 8 28343.43 0.47 Growth February 1 Relish Pharmaceutic als Ltd. Merger Pharmace uticals Divine Heritage Hotels Pvt. Ltd. 11Feb14 1.19 1.85 55.73 Growth 2 P V R Ltd. Cinemas Divine Heritage Hotels Pvt. Ltd. 14Feb14 2508.37 2230.83 -11.06 Decline 3 Lumax D K Auto Inds. Automobil e Marico Kaya Enterprises 27Feb139.45 131.44 -5.75 Decline Growth policies and profitability's..... A R Sindhu & Dr. S. Madhavan AMET International Journal of Management 62 ISSN 2231-6779 / July – Dec 2016 Ltd. Ltd. 14 4 Lupin Ltd. Acquisition of shares Pharmace utical Adani Transmissio n (India) Ltd. 03Feb14 40967.8 0 41615.88 1.58 Growth 5 Lupin Ltd. Pharmace utical Nanomi B V 03Feb14 40967.8 0 41615.88 1.58 Growth 6 Tata Power Renewable Energy Ltd. Power M M S Infrastructu re Ltd. 25Feb14 1854.50 1493.91 -19.44 Decline 7 I T C Ltd. Edible Oils Oasis Tradelink Ltd. 06Feb14 257072. 81 255355.7 8 -0.67 Decline 8 Omaxe Ltd. Builders P P Devcon Pvt. Ltd. 07Feb14 3119.15 3104.67 -0.46 Decline March 1 Ravindra Energy Ltd. Merger Power Shree Renuka Energy Ltd. [Merged] 18Mar14 0.00 162.44 162.44 Growth 2 Ashok Leyland Ltd. Automobil e Divine Heritage Hotels Pvt. Ltd. 27Mar14 3.85 4.54 17.90 Growth 3 Power Grid Corpn. Of India Ltd. Acquisition of shares Power Unchahar Transmissio n Ltd. 24Mar14 49986.4 6 52587.44 5.20 Growth 4 Oil India Ltd. Petroleum and Natural Gas. Indian Oil Corpn. Ltd. 14Mar14 28211.8 8 28343.43 0.47 Growth 5 R P P Infra Projects Ltd. Infrastruct ure Greatful Mercantile Pvt. Ltd. 28Mar14 131.62 137.12 4.18 Growth 6 R P P Infra Projects Ltd. Infrastruct ure Birdhi Chand Pannalal Agencies Ltd. 28Mar14 131.62 137.12 4.18 Growth Growth policies and profitability's..... A R Sindhu & Dr. S. Madhavan AMET International Journal of Management 63 ISSN 2231-6779 / July – Dec 2016 7 Sterlite Grid Ltd. Telecom & Power Ltd. Rapp Transmissio n Co. Ltd. 12Mar14 793.82 833.26 4.97 Growth 8 Surana Telecom & Power Ltd. Telecom & Power Ltd. Surana Solar Systems Pvt. Ltd. 21Mar14 33.33 32.00 -3.99 Decline 9 U P L Ltd. Chemical U P L Do Brasil Industria E Comercio De Insumos Agropecuari os S A 04Mar14 79759.0 8 79889.00 0.16 Growth Source: From BSE & Annual Report with Authors' calculation -20.00 0.00 20.00 40.00 60.00 80.00 100.00 120.00 140.00 160.00 180.00 Market value of company for the study period January to March Market value of company Growth policies and profitability's..... A R Sindhu & Dr. S. Madhavan AMET International Journal of Management 64 ISSN 2231-6779 / July – Dec 2016 Interpretation: The above table reveals the decline and growth of Market Value of the Company, where the average market price per share values is taken from BSE. The outstanding share values are taken from previous year annual report. In the month of January the market value of the company is increased on an average when compared with the five acquired companies, where in the month of February the market value shows a decline for majority of the selected companies. In the month of March the selected companies shows a growth as a whole. Suggestion The main purpose of M&A is expanding their operation and increasing their profits. Indian markets have witnessed flourishing trend in mergers which may due to business consolidation by large industrial houses, consolidation of business by multinationals operating in India, increasing competition against imports and acquisition activities. From this study, we can understand that many big companies are more indulged in M&A, but all these M&A do not end in success there are failures too. By taking proper initiative before merger we can avoid these failures. If we focus on their creative performance of the firms, technological support, realized in lost talent, lost productivity tardiness, absenteeism, turnover, reason on their reduced output & declining morale, loyalty, commitment and by relevant leadership they can come across these failures. Therefore, we can achieve the new entity to a long run success. Conclusion Mergers are considered as an important strategic tool in the global economy. The current study was based on the secondary data, where 22 merged and acquired companies have been analysed. Various attributes like Earnings per Share (EPS), Debt Equity Ratio (DER), Networth and Market value of companies were taken for this analysis, where growth percentage has been calculated. And the findings were, the DER & Networth shows a common growth strategy, where Market Value of Companies shows a major growth perspective but on the Growth policies and profitability's..... A R Sindhu & Dr. S. Madhavan AMET International Journal of Management 65 ISSN 2231-6779 / July – Dec 2016 part of EPS it shows a major decline. When EPS is negative, it means the company is losing its earnings, while it typically lowers the value of stock also. Thus it can be concluded that mergers have a significant change in enhancing the 'profitability' or 'shareholders wealth' of acquirer companies. Therefore the researcher recommends that while going for M&A we need to check the company's each and every financial aspects and their cost values, because every single aspect is linked to various other major concepts. By checking those concepts and cost values we can determine whether we can go for a merger or acquisition deal. 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