Article 1

Topic: MERGER MOTIVES, TRENDS AND POST MERGER PERFORMANCE: EVIDENCE

FROM ELECTRICITY COMPANIES IN INDIA

Background

Energy and Utilities have become an important topic around the world. Consumer are facing high prices and
supply constraints in electricity sector. Thus, the paper attempts to study the need and factors driving M&A’s
in electricity sector. Their various factors which affect M&A’s. These factors include GDP, competitive
advantage, higher interest rates, fiscal policies etc.

Objectives:

The study attempts to know that reason of M&A deals in the electricity sector and how the highly regulated
environment has an effect on such kind of deals.

Research Methodology:

Data have been collected from Centre for Monitoring Indian Economy (CMIE) Prowess database. For the
study data have been collected for M&A involved companies only in electricity sector. The data is related for
the year from 1st January 1990 to 31st December 2011. The sample acquirers are in main product group like
thermal electricity, coal based thermal electricity, electricity energy, and hydroelectricity.

Key Findings and Suggestion

The need for M&A’s in electricity sector came only after economic reforms of 1991 as before that the
government had monopoly over electricity industry. The mergers before 2000 in electricity sector was very
rare with companies enjoying monopoly of their line of production. It was only after 2000 that mergers and
acquisition became popular after. M&A’s has helped electricity sector to overcome various such as huge
technical and commercial losses due to unprofessionally managed companies, problem of cross subsidization
and inadequate distribution channel. In recent years there had been an increase in M&A’s in electricity sector
due to high prices and regulatory uncertainties. The study shows that there had been improvement in
performance of the companies after 2 years of merger. Various parameters such as return on net worth, current
ratio, quick ratio, net working capital by sales ratio etc. were used to evaluate the performance of the
companies post-merger. The return on net worth and asset turnover ratio has increased over period. The return
on the capital employed decreased during the 1st and 2nd year. Thus, this shows that initially the effect of
mergers and acquisition in electricity sector will be negative but will soon provide fruitful results, M&A’s has
resulted in economies of scale and synergetic benefits. But one thing that the acquirer company should keep
in mind is that they should acquire those companies whose benefits are more than its cost and there are many
problem associated with it like the job cuts so to protect the ethical and cultural value.

Conclusion

The need for more power supply due to growing population had led to development of the electricity sector
with mergers and acquisition playing a major role in their development. With the entrance of private players
the electricity sector is on the journey of major change as the traditional boundaries defining this sector has
become blurred. The electricity sector will enjoy a long term development in a physically sound way with
electric companies with sound financial backup playing a major role and small companies staying focused on
acquisition to improve their core competitiveness with expanding market share.

Article 2

Topic: Trends in Banking Sector in India: An Analysis

Background

There had been a major transformation in Indian Banking Sector, with several Policy Initiatives and Positive
Business Environment. Enhanced spending on infrastructure, and projects and continuation of reforms are
expected to provide further impetus to growth. All these factors suggest leads India's banking sector is set for
a robust growth with the increasing business opportunities.

Objectives

The paper discusses about the scenario of mergers and acquisition in Indian Banking sector.

The objectives of the Study are

• To present an overview of Phase wise Mergers in the Banking Sector

• To analyse the Sector wise & time wise performance of the Mergers

• To analyse the trends in mergers in Banking Sector in India

Research Methodology:

The study is based on Secondary Sources which includes the Annual Reports RBI Database; research
publications etc. The Period of the Study is from 1961 to 31st March 2017. Several Mergers have taken place
in the Banking Sector in India between various Banks for various reasons. The study has taken up all those
Banks who have participated in the Merger activity since the year 1961 to 31st March 2017.
Key Findings and Suggestions:

The basic reason for M&A’s in banking sector was to strengthen it by making weak and loss making banks to
merge with profit making and strong banks but some mergers also take place between the profit making banks
for availing the benefits by the ways of synergies to the merger. India's banking sector is set for a robust
growth with the increasing business opportunities. Most of mergers and acquisition took place among the
public sector banks. It was only after the post liberalization period that the private banks mergers were evident.
During the pre-nationalism period the growth of banking sector due which RBI had to formulate schemes for
compulsory merger of banks. Nationalization of banks led to 13 mergers during the post nationalization period.
This was done to prevent concentration of economic power and wealth maximization only in few hands.
During the post liberalization the biggest merger was between Punjab National Bank and New Bank of India.

Conclusion:

The banking sector focused more on having strong banks rather than have a large number of banks. Private
sector banks had a total of 28 mergers out of the 81 mergers with 32.18% of total mergers. This shows that
the regulatory policies were not much in favor of the private banks Mergers are considered to be an important
strategy to fight losses, NPA’s and to expand the banking sector.

Article 3

An Experiential Study of Mergers and Acquisitions in Indian Banking Sector (Dr. Jyoti
H. Lahoti)

BACKGROUND
Mergers and Acquisition is combination or taking over of companies, where in the ownership of companies,
are transferred or consolidated with other entities. These corporate restructuring methods aim at enhancing the
overall profit statement, by initiating synergy and transferring of resources. It not only aims at strengthening
the financial position, but also, aims at gaining the market share, increasing the competitive edge and lead to
risk and product diversifications.
Considering the banking sector in India, it is one of the ever growing sector with continuous innovations and
hence, becoming the preferred destination for international investors. The increase in the mergers and
acquisitions among banks is to make available few large banks to the citizens with many branches, than many
small banks with few branches, with the intention of creating maximum value to all the stakeholders.
OBJECTIVES
The paper aims to provide reasons for increased mergers and acquisitions in banking sector and also analyse
the benefits derived. It also focuses on studying expertise recommendations and understand the banking
mergers and acquisitions in general.

RESEARCH METHODOLOGY
The research is dependent on both Primary and Secondary sources of data, wherein, direct observation was
used on studying various websites and data collection through various study materials and research work was
conducted. Annual reports, BSE, NSE and SEBI are few data collection platforms for the research.

KEY FINDINGS AND SUGGESTION

The base of initiation of every merger and acquisition process is determine the objectives to be achieved.
There are various reasons companies decide to merge or acquire, like, market expansion, reduce competition,
to strengthen the financial stability, for product supplies, etc.
For any company, an internal growth process can be very time consuming and costly to increase the market
share or grow in size, and hence, companies prefer mergers and acquisitions to achieve the same in relative
short period. Mergers and Acquisitions also leads to increase in synergy which intern helps in incremental
value derived from either operational or financial efficiency. Companies can benefit in form of management
efficiency or acquirement of technology, which otherwise can be very costly.
It is suggested that entire process of mergers and acquisitions must be transparent and there must be full
disclosure of all the relevant important information to all the stakeholders. There have been instances where a
committee is formed to safeguard the interests of the stakeholders which leads to hurdles in the process.
Divestment are sought to when mergers result in creation of problems.

CONCLUSION
Mergers and Acquisitions are not any recent trends in the banking sector but can be traced back to 1920, which
led to establishment of Imperial Bank of India. These corporate restructuring methods in India have led various
achievements leading to manifold growth.
The research also discovers poor legal framework in respect to credit recovery and requirement of increase in
focus on computerization of PSB’s. Review of the RBI Act, the Nationalization Act, Banking Regulation Act,
and the SBI Act will help in uninterrupted and unfailing corporate restructuring.
Article 4

IMPACT OF MERGER AND ACQUISITION ON EMPLOYEE PROBABILITY PRE

AND POST MERGER

Background

The Indian Banking industry is incorporating new changes at quick pace to deliver better and newer products
and services to the customers. The fastest way to do so merging with another bank or acquiring it. There have
been previous studies which analyze the effect of pre-merger and post-merger status of the company.

Objective

This study tries to find the effect of the merger and acquisition on the employees’ profitability of the bank, in
special reference to State Bank of India.

Research methodology

For the purpose of study, secondary data for calculating Employee profitability was recorded from RBI reports
for the year 2007 to 2012. The values for State bank of India which was recently merged in 2010 with one of
its subsidiary State bank of Indore were used for the study.

Key Findings and Suggestions

There are researches which focus on the reputation of the bank post-merger and its effect on the shareholders
wealth. There are other studies which study the problems faced by banks while merger and how mergers lead
to losing all customers and failing to attract new customers. Hence there are many studies conducted to study
the impact and effect of mergers and acquisitions. One research proves that with mergers and acquisition the
operating performance of the bank increases and it has a positive effect on the shareholders wealth. Yet another
European research suggested that mergers and acquisition have no significant effect

The merger and acquisition in banking is not an easy job. It must follow a set of procedures given by RBI,
SEBI, Indian Companies Act and Banking Regulation Act (1949). Structural changes have been made in the
banking systems as per the suggestions of the Narasimhan Committee.

The present study tries to relate the impact of murder and acquisition on employee probability and assesses
the profit per employee pre and post-merger or acquisition. One of the most important elements of the banking
industry is human resource. The employees in a bank determined the performance of the bank. Hence to the
impact of the merger on the employees is very important. For this purpose, secondary data was taken from the
RBI reports from 2007 to 2012. The impact of SBI's merger with its subsidiary State Bank of Indore was
studied in this research. The values of business per employee and profit per employee was compared with bar
diagram.

Conclusion

The results detected that there is a dip in the profit per employee due to the merger. But again in 2012, the
profitability indices increased. Hence, this proves that the profitability decreases immediately after the merger
but increases over a period of 2 years. Hence a merger was proven to be good.

REFERNCE
Lahoti, J. (2016). An Experiential Study of Mergers and Acquisitions in Indian Banking Sector. Indian Journal
of Research, 5(4), 398-400.

Leepsa. N. M. (2012). Mergers motives, trends and post-merger performance Evidence from Electricity
Companies in India. Journal of Business, Economic and Finance, 1(2)

Athma. P & Bhavani. A (2017). Trends in Banking Sector in India: An Analysis. 6(4)

Rani. S. C. & Indu. B (2015). Impact of Merger and Acquisition on Employees Profitability Pre and Post-
Merger Scenario. Advances in Management. 8(3), 26-29