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PREFACE

This research report is basically made in order to understand the basis of the mergers and the acquisition between the banks and the various financial institutions takes place and the reasons to have such activity.

My research report topic:MERGERS AND ACQUISITIONS IN INDIA BANKING SECTOR.

The best learning experience was that I started from the very basics of getting to that position and not from the position itself. This helped me get useful insight and understanding of the banking sector and their growth prospects, the need the requirement which the Indian banking units need to expand their business.

There are two ways which company can grow; one is internal growth and the other one is external growth. The internal growth suffers from drawbacks like the problem of raising adequate finances, longer implementation time of the projects, uncertain etc. in order to overcome these problems a company can grow externally by acquiring the already existing business firms. This is the route of mergers and acquisition.

I also learnt a lot from collecting a vast and great information about the Indian banking Industry by simply taking up the task about the various working procedures and processes, while conducting the research out there, it was an opportunity for me to underwent such a knowledge grabbing research work and able to attain knowledge from there.

ACKNOWLEDGEMENT

I am very thankful to our Director Dr. VivekInderKochharsir for providing all the facilities to complete my research report.

I, gratefully acknowledge the valuable guidance and support of Mr. Chetankhanna, my project guide, who had been of immense help to me in choosing the topic and successful completion of the research report.

I extend my sincere thanks to all who have either directly or indirectly helped me for the completion of this project.

ISRAR AHMAD

TABLE OF CONTENTS
CHAPTER 1. INTRODUCTION DESCRIPTION PAGE NOS. 1

2. LITERARTURE REVIEW

14

3. RESEARCH METHODOLOGY

29

4. DATA ANALYSIS & INTERPRETATION

33

5. FINDINGS

53

6. SUGGESTIONS

54

7.

LIMITATION OF RESEARCH STUDY

55

8.

CONCLUSION

56

9. BIBLIOGRAPHY

57

EXECUTIVE SUMMARY
Merger is a combination of two or more companies into one company. The acquiring company, (also referred to as the amalgamated company or the merged company) acquires the assets and the liabilities of the target company (or amalgamating company). Typically, shareholders of the amalgating company get shares of the amalgamated company in exchange for their shares in the Target Company. There are two ways which company can grow; one is internal growth and the other one is external growth. The internal growth suffers from drawbacks like the problem of raising adequate finances, longer implementation time of the projects, uncertain etc. in order to overcome these problems a company can grow externally by acquiring the already existing business firms. This is the route of mergers and acquisition. OBJECTIVE To evaluate whether the mergers and acquisitions in banking sector create any shareholder value or not. RESEARCH TOOLS Financial ratios, Economic Value added and market Value Added. SAMPLE DESIGN A sample of three mergers has been taken and the financial statements of five years had been analyzed. The five-year period comprises of Pre-merger period and post-merger period. CONCLUSION My final and ultimate conclusion is, yes, merger of all these companies have created value to the shareholders of the target company and acquired company

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