Abstract
The banking and financial services (BFSI) sector is one of the most crucial areas in any economy. It is fastest growing and the listed players in this space has given high returns to the investors over the last decade. Commercial banks in the Indian context have witnessed radical changes in terms of enormous progression in off-balance sheet risk management of financial assets, regulatory amendments, NPA recognition norms, significant consolidation of the financial sector and introduction of e-commerce norms and online banking. In this context, Indian economy is similar to the other economies of BRICS countries. These countries are emerging economies with higher GDPs and undertaking various reforms to boost the consumption, transparency and business needs. So, it is pertinent to evaluate the M&A activities that have taken in India and other BRICS countries and comparing the same. This paper analyses the M&A that have taken place in India and other BRICS countries based on certain fundamental parameters which are based on regulatory requirements, profitability and overall returns on investments. The results of these tests indicate that there is insignificant change in most of parameters during post-merger phase. Further, other parameters showed a negative effect of merger on acquirer during post-merger period. Keywords: Mergers and Acquisitions, BRICS, Financial Performance, Banking Sector JEL Classifications : G34, G21 DOI: https://doi.org/10.32479/ijefi.10091
Highlights
Expanding business activities by way of organic or inorganic mode is an essential decision in terms of survival of business in today’s world
Combined BRICS Countries (Excluding India) Analysis has been undertaken for all the mergers undertaken between the period 2005 and 2015 in all BRICS countries excluding
This paper studied various parameters that can verify whether the merger in Indian and BRICS countries can be concluded as a success
Summary
Expanding business activities by way of organic or inorganic mode is an essential decision in terms of survival of business in today’s world In this context, mergers and acquisitions are one of the possible ways which can provide the expansion to the companies at a faster pace. To resolve the issues especially in public sector banks, as recently as in August 2019, the Government of India (GOI) announced mergers of ten public sector banks into four banks, bringing down the total PSUs from 27 to 12 In this context, it pertinent to scrutinize the effects of M&As on banking sector and the effects it has on the merged entity in terms of its operations.
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