Abstracts of Some Past Research

Abstracts of Some Past Research

Leepsa, N. M. & Mishra, C. S., 2014. Return from Indian Acquisitions: Does Deal Size Matter?

Co-author: Dr. Chandra Sekhar Mishra, VGSoM, IIT Kharagpur

Mergers and acquisitions are the corporate growth strategy that has grown in recent years. The performance of companies in post-acquisition period is influenced by various factors; one of the factors which remain explored is deal value. This paper attempts to investigate the post-acquisition performance of manufacturing companies in India based on their deal size-small and large deal size. Performance is evaluated on profitability parameters (return on capital employed, return on net worth, return on assets) of the company in pre and post-acquisition three years using paired t-test and Wilcoxon signed rank test. It is found that for the variable ROApost12 and ROApost123, the post-acquisition performance is positive for large deals while negative for small deals. There is no difference in ROApost1 performance in pre and post-acquisition performance in case of small deals while negative performance in ROApre1 in the post-acquisition first year. For the rest variables, ROCE and RONW, the large and small deals perform in a similar manner, but the results of large deals are more significant than small deals.

Leepsa, N. M. & Mishra, C. S., 2014. Stock Price Returns of Manufacturing Companies in India in Post M&A Period

Co-author: Dr. Chandra Sekhar Mishra, VGSoM, IIT Kharagpur

Mergers and acquisitions are those corporate growth strategies which are taken by the companies to position their business in top among their competitors. As a part of business strategy, these are those investment decisions which contribute various economic/financial or non-economic /non-financial advantages to the shareholders, customers and employees related to the firm. Business combinations through mergers or acquisitions, helps the companies to use their complementary physical and human resources that make use of their competence and brings competitive advantage of the company among the rest of companies. In the changing face of competitive business environment, companies in India and around the world are using this M&A as growth strategy. This paper investigates the pre and post M&A stock price performance of listed manufacturing companies in India. For the purpose, one year before and one year after M&A is taken to analyse performance and know immediate impact of M&A. Performance is also analysed using average of two year before and after M&A. The period of study is from 1997 to 2011 taking the acquirers gone for M&A deals during the period from 1st January 2000 to 31st December 2008.  It is found that in majority of cases (56%, i.e. 67 out of 139 acquirers); the companies have shown positive return in terms of market price in both one year as well as two year after M&A.

Wealth Creation through Acquisitions

Co-author: Dr. Chandra Sekhar Mishra, VGSoM, IIT Kharagpur

Mergers and Acquisitions (M&A) are considered as the engines for accelerated and consistent growth for companies. M&A is more significant in today’s corporate world due to globalization, liberalization and intensely competitive business environment. The present study is an attempt to examine post M&A performance in manufacturing companies in India. ‘Economic value added’(EVA®), a registered trademark of Stern Stewart & Co and a measure of economic profit, is considered in evaluating the industry adjusted returns for the companies that have gone for acquisitions. In this article, we have evaluated using ‘‘paired two sample t tests whether there is any significant difference between the pre and post acquisition performance (in terms of rate of EVA or economic profit) in manufacturing companies in India. The scope of the study is limited to listed manufacturing companies in India that have gone for acquisitions deals during 2003–2004 to 2006–2007. We have taken 29 acquirer and target sample firms.

Winner and Loser of M&A Game: Evidence from Manufacturing Companies in India

Co-author: Dr. Chandra Sekhar Mishra, VGSoM, IIT Kharagpur

Mergers and acquisitions (M&A) have been widely used by companies around the world and have an ever-increasing presence in Indian business. Yet various academic and literature reviews show that there is no conclusive view on whether M&A strategies help in improving the performance or deteriorating the same. There are more of (loser) failure companies than success (winner) companies when they adopt M&A. This paper considers the M&A in Indian manufacturing companies and classifies them into success (winner) and failure (loser) cases based on improvement in return on net worth after three years post-M&A period.

Do Mergers & Acquisitions Pay Off Immediately?

Co-author: Dr. Chandra Sekhar Mishra, VGSoM, IIT Kharagpur

Mergers and Acquisitions (M&LAS) are the vital growth strategies of corporates in the scenario of globalization and liberalization to face competition and move ahead. M&A has grown not only in volume but also in value. It is often stated that the companies go for inorganic growth strategies like M&A to improve performance. There is no clear-cut support from the literature about the effect of M&A on corporate performance. As per various studies, companies perform either better or worse after M&As. But the question arises how long the effect of mergers and acquisitions remain on the companies. The present study is an attempt to find out the time frame for knowing the effects on performance of manufacturing companies from M&A. The results suggest that the impact of M&A on companies is reflected in the immediate years specifically the event year and the post-M &A one year.

Post-Acquisition Performance of Indian Manufacturing Companies: An Empirical Analysis

Co-author: Dr. Chandra Sekhar Mishra, VGSoM, IIT Kharagpur

Mergers and Acquisitions (M&A) is the inorganic growth strategies which have got its significance in today’s corporate world due to the intensely competitive business environment. While M&A is considered as one of the strategies for growth, the companies are expected to perform post-M&A so that those are proved to create wealth for shareholders. From the literature review, it is found that there is no conclusive evidence about the impact of M&A on corporate performance. Moreover, in recent period, M&A deals have gone up manifold. Hence there is a need to look into the post-M&A performance of companies. The present study is an attempt to find out the difference in post-acquisition performance compared with pre-acquisition in terms of profitability, liquidity and solvency. The scope of the study is limited to manufacturing sector companies in India. The statistical tools used are Paired Sample t-Test and Wilcoxon Signed Ranks Test. Here we have tested four hypotheses using eight financial ratios to know the (1) overall the Post Acquisition financial performances in manufacturing sector companies in India (2) performance of acquirer acquiring relatively large and small companies performance of large size companies and small size acquiring companies (3) performance of large Size companies and small size acquiring companies (4) performance of related acquisition deals and unrelated acquisition deal acquiring companies. We have taken 33 sample acquisition deals during 2003-04 to 2006-07 to evaluate their performance from 2000-01 to 2009-2010 for pre-acquisition three years and post-acquisition three years.

Crompton Greaves: A Case Study on What makes a Merger Successful

Co-author: Dr. Chandra Sekhar Mishra, VGSoM, IIT Kharagpur

Mergers and acquisitions (M&A) is the corporate strategies that help in achieving various financial, operational and revenue synergies that not only strengthen but also accelerate the growth of corporate firms. Like many other Indian companies Crompton Greaves, an Avantha Group company, has adopted M&A as a strategy and has possibly improved the corporate performance on all the fronts. In this case study, an attempt is made to analyze the M&A strategy of Crompton Greaves and post M&A performance by applying different financial metrics.

Merger Performance: The Marriage between SAIL and MEL

The purpose of the study is to analyze the financial performance of Steel Authority of India Ltd (SAIL) after merger deal with MEL. The financial statements are analyzed for pre and post-merger five years (2000-2010) by using seven financial ratios. Accounting approach use accounting measures and productivity measures from financial statements to evaluate the M&A success. In spite of creation limitations, accounting ratios are considered as reliable and convenient for making analysis since financial statements are audited. Ratio analysis is employed as is considered as a convenient technique to make a quantitative analysis of companies’ performance.

The results show that the financial performance of SAIL in terms of profitability, liquidity, and solvency has improved after the merger. It indicates that merger deals improve the financial performance of companies. The limitation of the study is that it only focused on the financial aspect of the merger but ignores which factor have impacted the deals’ success and failure. The study can be made by controlling factors affecting steel industries. It would enable the organizations to have the choice between organic and inorganic growth strategy. Case-based research on pre and post-merger on steel companies is made which is few as far as knowledge is concerned. This paper is an attempt to look into the specific deal by which it would make deep understanding of merger performance in India.

Merger Motives, Trends, and Post Merger Performance: Evidence from Electricity Companies in India

Mergers and acquisitions (M&A) in India are the outcome of globalization and liberalization. The factors that have triggered the volume of M&A are various economic factors like competitive environment, growth in gross domestic product, higher interest rates, and fiscal policies. Mergers and acquisitions have gained significance in the corporate world as an important growth strategy for both acquirer and target companies. M&A have mushroomed in almost all sectors like manufacturing, mining, construction sector, financial services, and services other than financial. M&A has also played an active role in the electricity sector in India. In this paper, we explore the current scenario of M&A in the Electricity sector and the factors driving the M&A. In particular, we investigated related and unrelated M&A deals, Public & Private companies go for the deal, year wise deals, and group affiliation deals in the electricity sector. The final sample is 32 deals i.e. companies where either acquirer or target with data availability. We also focused on the regulatory aspect of M&A in the electricity sector. The period of study is from 1st January 1990 to 31st December 2011. Our finding suggests that M&A in electricity is highly regulated and thus deals are made to survive in this regulated environment even though many deals are not one if compared to other sectors.

Performance Evaluation on Acquisition in India; A Case Study on ACC Limited Acquisition of Everest Industries

Mergers and acquisitions have gained its significance around the world. Therefore most of the research is carried out to find out whether they are value creating or value destroying in nature. Limited Studies are undertaken in respect of Indian merger and Acquisition cases. Most of the empirical studies are based on accounting approach or market approach. This paper made case study analysis using financial return method and market return method. Case study was undertaken for the deal ACC limited and Everest Industries limited. It is found that deal with ACC limited and Everest Industries Limited is a successful deal. The study is carried out for 18 years from period 31st March 1992 to 31st March 2010. The pre-acquisition and post-acquisition period is 9 years each (‐9 to +9).  Performance has been evaluated based on growth, efficiency, revenue generation and cost reduction of the acquirer and target firm after they went for M&A deals. Merger has helped in revenue increase and cost decrease.

Post-Merger Financial Performance: A Study with Reference to Select Manufacturing Companies in India

Co-author: Dr. Chandra Sekhar Mishra, VGSoM, IIT Kharagpur

Mergers and acquisitions (M&A) are the inorganic growth strategies which have got its significance in today’s corporate world due to the intensely competitive business environment. The present paper intends to study the trend in merger and acquisition (M&A) particularly with reference to manufacturing companies. While M&A is considered as one of the strategies for growth, the companies are expected to perform post-M&A so that those are proved successful. From the literature review, it is found that there is no conclusive evidence about the impact of M&A on corporate performance. Moreover, in the recent period, M&A deals have gone up manifold and regulations relevant for M&A have also undergone change. Hence there is a need to look into the trend of M&A and the post-M&A performance of companies. The present study is an attempt to find out the difference in post-merger performance compared with pre-merger in terms of profitability, liquidity, and solvency. The scope of the study is limited to manufacturing sector companies in India. The statistical tools used are descriptive statistics, paired sample t-test.

Entrepreneurial Opportunity in Educational Sector in Orissa

Co-Author-Prof. Pradyot Keshari Pradhan

In this article, initially, we have made SWOT analysis of the educational system in Odisha. We have linked the importance of education, the importance of higher education, privatization of higher education. Then we have discussed the FDI in the education sector and how economic reforms have put Orissa in the threshold of rapid growth with the role of state government in developing entrepreneurial opportunities in the education sector through privatization of technical and management institutions. We found that there is need of the ample number of employment opportunities but not employability because of lack of skilled manpower. Since many foreign players are finding Orissa as an attractive destination for industrialization it seems there will be the need for more and more number of technical personnel and will need the more educational center for technical and management studies. We have highlighted and explored the entrepreneurial opportunities in the educational sector where educational entrepreneurs have really gained by the commercialization of the institutions.

Entrepreneurial Opportunity in Online Business in Orissa

Co-Author-Prof. Pradyot Keshari Pradhan

Orissa has exquisite handicrafts such as Applique Work, Horn Work, Lacquer Work, Silver Filigree, Palm Leaf Writings, Paper Mache, Pattachitra, Pottery Work, Santhal and Saora Paintings. In this paper, we have suggested how due to increase in Internet users can create unlimited boundaries and exposures for the handicraft vendors if they create their website and do online business through e-business. We have discussed the means of finance to do online business for handicrafts and how they can earn profits through the virtual marketplace.  This study is basically to educate the villagers how they generate greater demand for the handicrafts by creating an attractive website and avoiding loss due to middlemen and lack of awareness to domestic and global prospective customers outside Orissa.

Value-Based Management-Valuing the Values: The Mechanics, Dynamics, & Indian Insights

Co-Author-Prof. Pradyot Keshari Pradhan

In this theoretical paper, we have dealt with the concept and historical perspective of value-based management. It has also highlighted the dynamics or implementation process of VBM. It has also reflected VBM inaction by various Indian Companies such as Tata Group, Reliance Group, Amul Co-operative, Birla Group, Ambani Group, Zee TV, Steel Authority of India Ltd, Bombay Spinning Mill, Mittal Steel, Infosys, World Tel, Life Insurance Corporation, State Bank of India and Hindustan Lever. This article is prepared to provide ideas on why and how to exercise value-based management on various stakeholders such as Organisation, Shareholders, Employees, Customers, Government and Community. The paper gives details on practices and procedure on value-based management in the Indian context and attempts to highlight the VBM in various parameters like Innovativeness,  Quality, and Depth of Management, Financial Performance, Ethics and Transparency, Quality of Product and Services, People  Practices & Talent Management and Global Competitiveness. Value-based management of selected Indian Companies is also discussed based on brand parameters like Image and perception, Brand awareness, Brand loyalty, Brand association and Brand performance.

Ecopreneurship: Making the World Better

Co-Author-Prof. Pradyot Keshari Pradhan

This article is a conceptual paper where we have discussed the nexus between entrepreneurship and Ecopreneurship. We have also highlighted the difference between the two terms and showed why there is a need to turn the goal from entrepreneurship to Ecopreneurship. The article attempts to reveal the gap between industrialization and environmental conservation and how a balance between entrepreneurship and clean environment schemes can be achieved. In this work, we have also discussed the benefits, principles, challenges of Ecopreneurship from various available past literature. A case of real-life ecopreneur is also discussed. The article concludes stating that if the entrepreneurs (ecopreneurs) develop environment-friendly business practices and products, it will save the mother earth and prevent the catastrophic destruction and make the world a better place to live in.

India’s Growth Vector: How Sustainable is the Service Sector Boom?

Co-Author-Prof. Pradyot Keshari Pradhan

In this article, an attempt is made to analyze the growing importance of service sector in the growth vector, to study how much service sector contributes to GDP in comparison with agricultural and manufacturing sector, to study how much each component of the service sector contributes to GDP, to analyze whether the service led growth will sustain in the future time to come. In this article, we have also thrown light on problems created by service sector boom, misconceptions about services sector, constraints to service sector growth. We have observed the service sectors such as IT & ITES Sector, Telecom Sector, Financial Services, Retail Sector, Travel and Tourism Sector, Aviation Sector, Media and Entertainment, Health Sector, Real Estate Sector. The positive and negative outlook of the service sector in India is discussed.

Successful and Sustainable Entrepreneurship: The Spider Strategy

Co-Author-Prof. Pradyot Keshari Pradhan

The term ‘Entrepreneurship’ is not a new concept as people have accepted that it is better to be self-employed than being employed by someone else. It has attracted the attention of academics, researchers, government etc for which most of the reputed institutes like IIMs and IITs are encouraging students to start their career as an entrepreneur. India has witnessed many entrepreneurs coming up. But due to lack of proper strategy they fail. This study is an attempt to discuss different strategies for Successful and Sustainable Entrepreneurship. The term ‘Successful’ is for the benefit for the entrepreneur and the term ‘Sustainable’ is for the benefit for people (or planet or plant) other than the entrepreneur. The study brings out Spider’s Strategy Model for Successful and Sustainable Entrepreneurship. In this article, we have made an attempt made to bring out the strategies for the success of entrepreneur from the lessons we learn from characteristics of spider which is described as “The Spider’s Strategy”. This is a conceptual paper where the model is built by taking into account different theoretical literature studied from different sources.

                                                                                                                                                                                

Performance and Perspective of Mergers and Acquisitions in Indian Chemical Industry

Mergers and acquisitions (M&A) have played important role in the growth and development of companies. M&A is done in almost all industries. Since most of the M&A deals are done in chemical industry, the present study is based on the chemical industry. The present study is an attempt to find out the current trends of M&A in the chemical industry in India, the objectives behind the M&A deals, success or failure of companies in M&A in the chemical industry by making performance evaluation through financial analysis. The financial performance of chemical companies has been evaluated based on the three parameters namely liquidity, solvency and profitability in the post-merger period. The findings show that mergers have no impact on the financial performance of the chemical companies.

If you want to read any of the full paper of my research work, drop me an email at n.m.leepsa@gmail.com