Merger N Aquisition

[EVENT RETURN STUDY] Mergers & Acquisitions
1. Indian Economy- Mergers & Acquisitions
The Indian economy has undergone a major transformation and structural change
during the past decade or so as a result of economic reforms introduced by the
Government of India since 1991 in the wake of policy of economic liberalization and
globalization. In this liberalized era, size and "core competence" have become the
focus of every business enterprise. Naturally, this requires companies to grow and
expand in businesses that they understand well. Thus, leading corporate houses have
undertaken a massive restructuring exercise to create a formidable presence in their
core areas of interest. Mergers and acquisitions (M&As) is one of the most effective
methods of corporate restructuring and has, therefore, become an integral part of the
long-term business strategy of corporate.
The M&A activity has its impact on various diverse groups such as corporate
management, shareholders and investors, investment bankers, regulators, stock
markets, customers, government and taxation authorities, and society at large.
Therefore, it is not surprising that it has received considerable attention at the hands
of researchers world over. A number of studies have been carried out abroad
especially in the developed capital markets of Europe, Australia, Hong Kong, and US.
These studies have largely focused on different aspects, viz., (a) the rationale of
M&As, (b) allocational and redistribution role of M&As, (c) effect of takeovers on
shareholders' wealth, (d) corporate financial performance, etc. Some studies have
also been carried out to predict corporate takeovers using financial ratios. M&As,
being a new phenomenon in India, has not received much attention of researchers. In
fact, no comprehensive study has been undertaken to examine various aspects
especially after the Takeover Code came into being in1997. This study has been
undertaken to fill this gap.
Until upto a couple of year‘s back, the news that Indian companies having acquired
American-European entities was very rare. However, this scenario has taken a sudden
U turn. Nowadays, news of Indian Companies acquiring foreign businesses are more
common than other way round.
1 N. R. Institute of Business Management

Buoyant Indian Economy, extra cash with Indian corporates, Government policies and
newly found dynamism in Indian businessmen have all contributed to this new
acquisition trend. Indian companies are now aggressively looking at North American
and European markets to spread their wings and become the global players.
The Indian IT and ITES companies already have a strong presence in foreign markets;
however, other sectors are also now growing rapidly. The increasing engagement of
the Indian companies in the world markets, and particularly in the US, is not only an
indication of the maturity reached by Indian Industry but a lso the extent of their
participation in the overall globalization process.
The Top 10 acquisitions made by Indian companies worldwide
Deal val ue
Acquirer Target Company Country targeted Industry
($ ml)
Tata Steel Corus Group plc UK 12,000 Steel
Hindalco Novelis Canada 5,982 Steel
Videocon Daewoo Electronics Corp. Korea 729 Electronics
Dr. Reddy‘s Labs Betapharm Germany 597 Pharmaceutical
Suzlon Energy Hansen Group Belgiu m 565 Energy
Kenya Petroleu m
HPCL Kenya 500 Oil and Gas
Refinery Ltd.
Ranbaxy Labs Terapia SA Ro mania 324 Pharmaceutical
Tata Steel Natsteel Singapore 293 Steel
Videocon Thomson SA France 290 Electronics
VSNL Teleglobe Canada 239 Teleco m

2. Mergers & Acquisitions
Meaning of Merger
A merger is a tool used by companies for the purpose of expanding their operations
often aiming at an increase of their long term profitability. There are 15 different types
of actions that a company can take when deciding to move forward using M&A.
Usually mergers occur in a consensual (occurring by mutual consent) setting where
executives from the target company help those from the purchaser in a due diligence
process to ensure that the deal is beneficial to both parties. Acquisitions can also happen
through a hostile takeover by purchasing the majority of outstanding shares of a
company in the open market against the wishes of the target's board. In the United
States, business laws vary from state to state whereby some companies have limited
protection against hostile takeovers. One form of protection against a hostile takeover is
the shareholder rights plan, otherwise known as the ―poison pill‖.
In business or economics a merger is a combination of two companies into one larger

company. Such actions are commonly voluntary and involve stock swap or cash
payment to the target. Stock swap is often used as it allows the shareholders of the two
companies to share the risk involved in the deal. A merger can resemble a takeover but
result in a new company name (often combining the names of the original companies)
and in new branding; in some cases, terming the combination a "merger" rather than an
acquisition is done purely for political or marketing reasons.
Historically, mergers have often failed to add significantly to the value of the
acquiring firm's shares. Corporate mergers may be aimed at reducing market
competition, cutting costs (for example, laying off employees, operating at a more
technologically efficient scale, etc.), reducing taxes, removing management, "empire
building" by the acquiring managers, or other purposes which may or may not be
consistent with public policy or public welfare. Thus they can be heavily regulated.

Classification of Merger
 Horizontal merge rs take place where the two merging companies produce
similar product in the same industry.
 Vertical mergers occur when two firms, each working at different stages in the
production of the same good, combine.
 Market Extension Merger and Product Extension Merger
Market Extension Merger
As per definition, market extension merger takes place between two companies that
deal in the same products but in separate markets. The main purpose of the market
extension merger is to make sure that the merging companies can get access to a
bigger market and that ensures a bigger client base.
Product Extension Merger
According to definition, product extension merger takes place between two business
organizations that deal in products that are related to each other and operate in the
same market. The product extension merger allows the merging companies to group
together their products and get access to a bigger set of consumers. This ensures that
they earn higher profits.
 Congene ric me rgers occur where two merging firms are in the same general
industry, but they have no mutual buyer/customer or supplier relationship, such
as a merger between a bank and a leasing company.
 Conglomerate merge rs take place when the two firms operate in different
industries.
A unique type of merger called a reverse merger is used as a way of going public
without the expense and time required by an IPO.
The contract vehicle for achieving a merger is a "merger sub".

 Accretive mergers are those in which an acquiring company's earnings per

share (EPS) increase. An alternative way of calculating this is if a company with
a high price to earnings ratio (P/E) acquires one with a low P/E.
 Dilutive mergers are the opposite of above, whereby a company's EPS

decreases. The company will be one with a low P/E acquiring one with a high
P/E.
The completion of a merger does not ensure the success of the resulting
organization; indeed, many mergers (in some industries, the majority) result in a net
loss of value due to problems. Correcting problems caused by incompatibility—
whether of technology, equipment, or corporate culture— diverts resources away
from new investment, and these problems may be exacerbated by inadequate
research or by concealment of losses or liabilities by one of the partners.
Overlapping subsidiaries or redundant staff may be allowed to continue, creating
inefficiency, and conversely the new management may cut too many operations or
personnel, losing expertise and disrupting employee culture. These problems are
similar to those encountered in takeovers. For the merger not to be considered a
failure, it must increase shareholder value faster than if the companies were
separate, or prevent the deterioration of shareholder value more than if the
companies were separate.

Meaning of Acquisition
An acquisition, also known as a takeover, is the buying of one company (the
‗target‘) by another. An acquisition may be friendly or hostile. In the former case,
the companies cooperate in negotiations; in the latter case, the takeover target is
unwilling to be bought or the target's board has no prior knowledge of the offer.
Acquisition usually refers to a purchase of a smaller firm by a larger one.
Sometimes, however, a smaller firm will acquire management control of a larger or
longer established company and keep its name for the combined entity. This is
known as a reverse takeover.
Types of Acquisition
A company is said to have "Acquired" a company, when one company buys another
company. Acquisitions can be either:
 Hostile
 Friendly
In case of hostile acquisitions, the company, which is to be bought has no

information about the acquisition. The company, which would be sold is taken by
surprise.
In case of friendly acquisition, the two companies cooperate with each other and
settle matters related to acquisitions.
There are times when a much smaller company manages to take control of the
management of a bigger company but at the same time retains its name for the
combination of both the companies. This process is known as "reverse takeover".
Kinds of acquisitions:
There may be two types of acquisitions depending on the option adopted by the
buying company. In one case, the buying company may buy all the shares of the
smaller company. The other option is buying the assets of the smaller companies.

2.1 Business Valuation
The five most common ways to evaluate a business are
 Asset valuation
 Historical earnings valuation
 Future maintainable earnings valuation
 Earnings Before Interest Taxes Depreciation and Amortization (EBITDA)
valuation
 Shareholder's Discretionary Cash Flow (SDCF) valuation.
Professionals who valuate businesses generally do not use just one of these methods
but a combination of some of them, as well as possibly others that are not
mentioned above, in order to obtain a more accurate value. These values are
determined for the most part by looking at a company's balance sheet and/or income
statement and withdrawing the appropriate information. The information in the
balance sheet or income statement is obtained by one of three accounting measures:
a Notice to Reader, a Review Engagement or an Audit.
Accurate business valuation is one of the most important aspects of M&A as

valuations like these will have a major impact on the price that a business will be
sold for. Most often this information is expressed in a Letter of Opinion of Value
(LOV) when the business is being valuated for interest's sake. There are other, more
detailed ways of expressing the value of a business. These reports generally get
more detailed and expensive as the size of a company increa ses, however, this is not
always the case as there are many complicated industries which require more
attention to detail, regardless of size.
Financing Valuation
Mergers are generally differentiated from acquisitions partly by the way in which
they are financed and partly by the relative size of the companies. Various
methods of financing an M&A deal exist.

 Cash: Payment by cash. Such transactions are usually termed acquisitions rather
than mergers because the shareholders of the target company are removed from
the picture and the target comes under the (indirect) control of the bidder's
shareholders alone.
A cash deal would make more sense during a downward trend in the interest rates.
Another advantage of using cash for an acquisition is that there tends to lesser
chances of EPS dilution for the acquiring company. But a caveat in using cash is
that it places constraints on the cash flow of the company.
 Financing: Financing capital may be borrowed from a bank, or raised by an
issue of bonds. Alternatively, the acquirer's stock may be offered as
consideration. Acquisitions financed through debt are known as leveraged
buyouts if they take the target private, and the debt will often be moved down
onto the balance sheet of the acquired company.
 Hybrid: An acquisition can involve a combination of cash and debt, or a
combination of cash and stock of the purchasing entity.
Motives behind M&A
 Synergy: This refers to the fact that the combined company can often reduce
duplicate departments or operations, lowering the costs of the company relative
to the same revenue stream, thus increasing profit
 Increased revenue/Increased Market Share: This motive assumes that the
company will be absorbing a major competitor and thus increase its power (by
capturing increased market share) to set prices
 Cross selling: For example, a bank buying a stock broker could then sell its
banking products to the stock broker's customers, while the broker can sign up
the bank's customers for brokerage accounts. Or, a manufacturer can acquire and
sell complementary products
 Economies of Scale: For example, managerial economies such as the increased
opportunity of managerial specialization. Another example are purchasing
economies due to increased order size and associated bulk-buying discounts
 Taxes: A profitable company can buy a loss maker to use the target's loss as
their advantage by reducing their tax liability. In the United States and many
other countries, rules are in place to limit the ability of profitable companies to
"shop" for loss making companies, limiting the tax motive of an acquiring
company
 Geographical or othe r dive rsification: This is designed to smooth the earnings
results of a company, which over the long term smoothens the stock price of a
company, giving conservative investors more confidence in investing in the
company. However, this does not always deliver value to shareholders
 Resource transfer: resources are unevenly distributed across firms (Barney,
1991) and the interaction of target and acquiring firm resources can create value
through either overcoming information asymmetry or by combining scarce
resources.
These motives are considere d to not add shareholde r value
 Diversification: While this may hedge a company against a downturn in an

individual industry it fails to deliver value, since it is possible for individual
shareholders to achieve the same hedge by diversifying their portfolios at a
much lower cost than those associated with a merger
 Manager's hubris: manager's overconfidence about expected synergies from
M&A which results in overpayment for the target company
 Empire building: Managers have larger companies to manage and hence more
power.
 Manager's compensation: In the past, certain executive management teams had
their payout based on the total amount of profit of the company, instead of the
profit per share, which would give the team a perverse incentive to buy
companies to increase the total profit while decreasing the profit per share
(which hurts the owners of the company, the shareholders); although some
empirical studies show that compensation is linked to profitability rather than
mere profits of the company
 Vertical integration: Companies acquire part of a supply chain and benefit
from the resources. However, this does not add any value since although one
end of the supply chain may receive a product at a cheaper cost; the other end
now has lower revenue. In addition, the supplier may find more difficult y in

supplying to competitors of its acquirer because the competition would not want
to support the new conglomerate .
M&A Marketplace difficulties
 Concern for Secrecy
No marketplace currently exists for the mergers and acquisitions of privately

owned small to mid-sized companies. Market participants often wish to maintain
a level of secrecy about their efforts to buy or sell such companies. Their
concern for secrecy usually arises from the possible negative reactions a
company's employees, bankers, suppliers, customers and others might have if
the effort or interest to seek a transaction were to become known. This need for
secrecy has thus far thwarted the emergence of a public forum or marketplace to
serve as a clearinghouse for this large volume of business.
 Locating the Buyers
At present, the process by which a company is bought or sold can prove

difficult, slow and expensive. A transaction typically requires six to nine months
and involves many steps. Locating parties with whom to conduct a transaction
forms one step in the overall process and perhaps the most difficult one.
Qualified and interested buyers of multimillion dollar corporations are hard to
find. Even more difficulties attend bringing a number of potential buyers
forward simultaneously during negotiations. Potential acquirers in an industry
simply cannot effectively "monitor" the economy at large for acquisition
opportunities even though some may fit well within their company's operations
or plans.
 Costly middlemen services
An industry of professional "middlemen" (known variously as intermediaries,

business brokers, and investment bankers) exists to facilitate M&A transactions.
These professionals do not provide their services cheaply and generally resort to
previously-established personal contacts, direct-calling campaigns, and placing
advertisements in various media. In servicing their clients they attempt to create

a one-time market for a one-time transaction. Certain types of merger and

acquisitions transactions involve securities and may require that these
"middlemen" be securities licensed in order to be compensated. Many, but not
all, transactions use intermediaries on one or both sides. Despite best intentions,
intermediaries can operate inefficiently because of the slo w and limiting nature
of having to rely heavily on telephone communications. Many phone calls fail to
contact with the intended party. Busy executives tend to be impatient when
dealing with sales calls concerning opportunities in which they have no interest.
These marketing problems typify any private negotiated markets. Due to these
problems and other problems like these, brokers who deal with small to mid-
sized companies often deal with much more strenuous conditions than other
business brokers. Mid-sized business brokers have an average life-span of only
12-18 months and usually never grow beyond 1 or 2 employees.
 Complex Process
The market inefficiencies can prove detrimental for this important sector of the
economy. Beyond the intermediaries' high fees, the current process for mergers
and acquisitions has the effect of causing private companies to initially sell their
shares at a significant discount relative to what the same company might sell for
were it already publicly traded. An important and large sector of the entire
economy is held back by the difficulty in conducting corporate M&A (and also
in raising equity or debt capital). Furthermore, it is likely that since privately
held companies are so difficult to sell they are not sold as often as they might or
should be.
One part of the M&A process which can be improved significantly using
networked computers is the improved access to "data rooms" during the due
diligence process however only for larger transactions. For the purposes of
small- medium sized business, these datarooms serve no purpose and are
generally not used. Reasons for frequent failure of M&A was analyzed by
Thomas Straub in "Reasons for frequent failure in mergers and acquisitions - a
comprehensive analysis", DUV Gabler Edition, 2007.

 Short run factors
One of the major short run factors that sparked is the desire to keep prices high.
That is, with many firms in a market, supply of the product remains high. When
demand for the good falls, as illustrated by the classic supply and demand
model, prices are driven down. To avoid this decline in prices, firms found it
profitable to collude and manipulate supply to counter any changes in demand
for the good. This type of cooperation led to widespread horizontal integration
amongst firms of the era. Focusing on mass production allowed firms to reduce
unit costs to a much lower rate. These firms usually were capital- intensive and
had high fixed costs.
 Long run factors
In the long run, due to the desire to keep costs low, it was advantageous for
firms to merge and reduce their transportation costs thus producing and
transporting from one location rather than various sites of different companies as
in the past. This resulted in shipment directly to market from this one location.
In addition, technological changes prior to the merger movement within
companies increased the efficient size of plants with capital intensive assembly
lines allowing for economies of scale. Thus improved technology and
transportation are forerunners to the M&A. In part due to competitors as
mentioned above, and in part due to the government, however, many of these
initially successful mergers were eventually dismantled. Price fixing with
competitors created a greater incentive for companies to unite and merge under
one name so that they were not competitors anymore and technically not price
fixing.
Cross border M&A
In a study conducted in 2000 by Lehman Brothers, it was found that, on average,

large M&A deals cause the domestic currency of the target corporation to appreciate
by 1% relative to the acquirer's. For every $1-billion deal, the currency of the target
corporation increased in value by 0.5%. More specifically, the report found that in
the period immediately after the deal is announced, there is generally a strong

upward movement in the target corporation's domestic currency (relative to the

acquirer's currency). Fifty days after the announcement, the target currency is then,
on average, 1% stronger.
Due to the complicated nature of cross border M&A, the vast majority of cross
border actions have unsuccessful results. Cross border intermediation has many
more levels of complexity to it then regular intermediation seeing as corporate
governance, the power of the average employee, company regulations, political
factors customer expectations, and countries' culture are all crucial factors that could
spoil the transaction.
Merger and Acquisition Process
Procedure for merger and amalgamation is different from takeover. Mergers and
amalgamations are regulated under the provisions of the Companies Act, 1956
whereas takeovers are regulated under the SEBI Regulations.
The beginning to amalgamation may be made through common agreements between

the transferor and the transferee but mere agreement does not provide a legal cover
to the transaction unless it carries the sanction of company court for which the
procedure laid down U/s-391 of the Companies Act should be followed for giving
effect to amalgamation through the statutory instrument of the Court‘s Sanction.
The procedure is complex, involving not only the compromises or arrangements

between the company and its creditors or any class of them or between the company
and its members or any class of them, but it involves, safeguard of public interest
and adherence to public policy. These aspects are looked after by the Central Govt.
through Official Liquidator or Company Law Board, Department of Company
Affairs and the Court has to be satisfied of the same.

Top Management’s Commitments towards Merger and Amalgamation:
Top management defines the organization‘s goal and outlines the policy framework
to achieve these objectives. The organization‘s goal for business expansion could be
accomplished, inter alia through business combinations assimilating a target
corporate which can remove the present deficiencies in the organization and can
contribute in the required direction to accomplish the goal of business expansion
through enhanced commercial activity i.e. supply of inputs and market for out-put
product diversification, adding up new products and improved technological
process, providing new distribution channels and market segments, making
available technical personnel and experienced skilled manpower, research and
development establishments etc. Depending upon the specific need and cost
advantage with reference to creating a new set up or acquiring a well-established
set-up firm.
Search for a Merger Partner
The top management may use their own contacts with competitors in the same line
of economic activity or in the other diversified field which could be identified as
better merger partners or may use the contacts of merchant bankers, financial
consultants and other agencies in locating suitable merger partners. A number of
corporate candidates maybe short- listed and identified. Such identification should
be based on the detailed information of the merger partners collected from
published and private sources. Such information should reveal the following aspects
viz :-
i) Organizational history of business and promoters and capital structure

ii) Organizational goals
iii) Product, market and competitors
iv) Organizational set-up and management pattern
v) Assets profile: movable and immovable assets, land and building
vi) Manpower: skilled, un-skilled, technical personnel‘s and detailed particulars
of management employees

Negotiation
Top management can negotiate at a time with several identified short- listed
companies suited to be merger partner for settling terms of merger and pick-up one
of them which offers most favorable terms.
Negotiations can be had with target companies before making any acquisitional
attempt. Same drill of negotiations could be followed in the cases of merger and
amalgamation. The activity schedule for planning merger covers different aspects
like preliminary consultations with the perspective merger partner a nd seeking its
willingness to cooperate in investigations. There are other aspects, too, in the
activity schedule covering quantification, action plan, purpose, shape, and date of
merger, profitability and valuation, taxation aspects legal aspects and deve lopment
plan of the company after merger. The most important step at this stage of Valuation
of Shares and determination of Share Exchange Ratio.
Steps for Merger & Amalgamation

Once the merger partner has been identified and terms of merger are settled the
subsequent steps are given below:
1. Scheme of Amalgamation
The scheme of amalgamation should be prepared by the companies, which have
arrived at a consensus to merge. There is no specific form prescribed for scheme of
amalgamation but scheme should generally contain the following information :-
i) Particulars about transferee and transferor companies.

ii) Appointed date i.e. Cut-Off date from which the transferor company rest with
transferee company.
iii) Main terms of transfer of assets from transferor to transferee with power to
execute on behalf or for transferee the deed or documents being given to
transferee.
iv) Main terms of transfer liabilities from transferor to transferee covering any
conditions attached to loans/ debentures/ bonds/ other liabilities from
bank/financial institution/ trustees and listing conditions attached thereto
v) Effective date when the scheme will come into effect

vi) Conditions as to carrying on the business activities by transferor between

‗appointed date‘ and ‗effective date‘.
vii) Description of happenings and consequences of the scheme coming into effect
on effective date
viii) Share capital of transferor company specifying authorized capital, issued
capital
and subscribed and paid- up capital
ix) Share capital of transferee company covering above heads
x) Description of proposed share exchange ratio, any conditions attached thereto,
any fractional share certificates to be issued, transferee company‘s responsibility
to obtain consent of concerned authorities for issue and allotment of shares and
listing
xi) Surrender of shares by shareholder of transferor company for exchange into
new share certificates
xii) Conditions about payment of dividend, ranking of equity shares pro-rata
dividend declaration and distribution
xiii) Status of employees of the transferor companies from effective date and the
status of the provident fund, gratuity fund, super annuity fund or any special
scheme or fund created or existing for the benefit of the employees;
xiv) Treatment on effective date of any debit balance of transferor company balance
sheet.
xv) Miscellaneous provisions covering income-tax dues, contingencies and other
accounting entries deserving attention or treatment.
2. Approval of Board of Directors for the Scheme

Respective Board of Directors for transferor and transferee companies are required
to approve the scheme of amalgamation.
3. Approval of the Scheme by Specialized Financial Institutions/ Banks/

Trustees for Debenture Holders
The Board of Directors should in fact approve the scheme only after it has been
cleared by the financial institutions/ banks, which have granted loans to these
companies or the debenture trustees to avoid any major change in the meeting of

creditors to be convened at the instance of the Company Court‘s U/s-391 of the

Companies Act, 1956.
Approval of Reserve Bank of India is also needed where the scheme of

amalgamation contemplates issue of share/ payment of cash to non-resident Indians
or foreign national under the provisions of Foreign Exchange Management
(Transfer or Issue of Security by a Person Resident Outside India) Regulations,
2000. In particular, regulation 7 of the above regulations provide for compliance of
certain conditions in the case of scheme of merger or amalgamation as approved by
the court.
4. Intimation to Stock Exchange about Proposed Amalgamation

Listing agreements entered into between company and stock exchange require the
company to communicate price-sensitive information to the stock exchange
immediately and simultaneously when released to press and other electronic media
on conclusion of Board meeting according approval to the Scheme.
5. Application to Court for Directions

The next step is to make an application U/s-39(1) to the High Court having
jurisdiction over the Registered Office of the Company. The transferor and the
transferee company should make separate applications to the High Court. The
application shall be made by a Judge‘s Summons in Form No-33 supported by an
affidavit in Form No-34 (See Rule-82 of the Companies (Court) Rules, 1959). The
following documents should be submitted with the Judge‘s Summons:-
i) A true copy of the Company‘s Memorandum and Articles ;

ii) A true copy of the Company‘s latest audited balance sheet ;
iii) A copy of the Board Resolution, which authorizes the Director to make the
application to the High Court.
6. High Court Directions for Members’ Meeting

Upon the hearing of the summons, the High Court shall give directions fixing the
date, time and venue and quorum for the members‘ meeting and appoint an
Advocate Chairman to preside over the meeting and submit a report to the Court
Similar directions are issued by the court for calling the meeting of creditors in case
such a request has been made in the application.
7. Approval of Registrar of High Court to Notice for Calling the Meeting of

Membe rs/ Creditors
Pursuant to the directions of the Court, the transferor as well as the transferee
companies shall submit for approval to the Registrar of the respective High Courts
the draft notices calling the meetings of the members in Form No-36 together with
the scheme of arrangements and explanations, statement U/s-393 of the Companies
Act and Form of Proxy in Form No-37 of the Companies (Court) Rules to be sent to
members along with the said notice. Once Registrar has accorded approval to the
notice, it should be got signed by the Chairman appointed for meeting by the High
Court who shall preside over the proposed meeting of members.
8. Dispatch of Notices to Membe rs/ Shareholders

Once the notice has been signed by the Chairman of the forthcoming meeting as
aforesaid it could be dispatched to the members under Certificate of posting at least
21 days before the date of meeting.
9. Adve rtisement of the Notice of Membe rs’ Meetings

The court may direct the issuance of notice of the meeting of these shareholders by
advertisement. In such case Rule-74 of the Companies (Court) Rules provides that
the notice of the meeting should be advertised in; such newspaper and in such
manner as the Court might direct not less than 21 clear days before the date fixed
for the meeting. The advertisement shall be in Form No-38 appended to the
Companies (Court) Rules. The companies should submit the draft for the notice to
be published in Form No-38 in English daily together with a translation thereof in
the regional language to the Registrar of High Court for his approval. The
advertisement should be released in the newspapers after the Registrar approves the
draft.
10. Confirmation about Service of the Notice

Ensure that at least one week before the date of the meeting, the Chairman
appointed for the meeting files an Affidavit to the Court about the service of notices
to the shareholders that the directions regarding the issue of notices and
advertisement have been duly complied with.
11. Holding the Shareholders’ General Meeting and Passing the Resolutions
The general meeting should be held on the appointed date. Rule-77 of the
Companies (Court) Rules prescribes that the decisions of the meeting held pursuant
to the court order should be ascertained only by taking a poll. The amalgamation
scheme should be approved by the members, by a majority in number of members
present in person or on proxy and voting on the resolution and this majority must
represent at least ¾ thus in value of the shares held by the members who vote in the
poll.
12. Filing of Resolutions of Gene ral Meeting with Registrar of Companies

Once the shareholders general meeting approves the amalgamation scheme by a
majority in number of members holding not less than ¾ in value of the equity
shares, the scheme is binding on all the members of the company. A copy of the
resolution passed by the shareholders approving the scheme of amalgamation
should be filed with the Registrar of Companies in Form No-23 appended to the
Companies (Central Government‘s) General Rules and Forms, 1956 within 30 days
from the date of passing the resolution.
13. Submission of Report of the Chairman of the General Meeting to Court

The chairman of the general meeting of the shareholders is required to submit to the
court within seven days from the date of the meeting a report in Form No-39,
Companies (Court) Rules, 1959 setting out therein the number of persons who
attend either personally or by proxy, and the percentage of shareholders who voted
in favor of the scheme as well as the resolution passed by the meeting.
14. Submission of Joint Petition to Court for Sanctioning the Scheme

Within seven days from the date on which the Chairman has submitted his report
about the result of the meeting to the Court, both the companies should make a joint
petition to the High Court for approving the scheme of amalgamation. This petition
is to be made in Form No-40 of Companies (Court) Rules. The court will fix a date
of hearing of the petition. The notice of the hearing should be advertised in the same
papers in which the notice of the meeting was advertised or in such other
newspapers as the court may direct, not less than 10 days before the date fixed for
the hearing.
15. Issue of Notice to Regional Director, Company Law Board U/s -394-A
On receipt of the petition for amalgamation U/s-391 of Companies Act, 1956 the
Court will give notice of the petition to the Regional Director, Company Law Board
and will take into consideration the representations, if any, made by him.
16. Hearing of Petition & Confirmation of Scheme

Having taken up the petition by the court for hearing it will hear the objections first
and if there is no objection to the amalgamation scheme from Regional Director or
from any other person who is entitled to oppose the scheme, the court may pass an
order approving the scheme of amalgamation in; Form No-41 or Form No-42 of
Companies (Court) Rules. The court may also pass order directing that all the
property, rights and powers of the transferor company specified in the schedules
annexed to the order be transferred without further act or deed to the transferee
company and that all the liabilities and duties of the transferor company be
transferred without further act or deed.
17. Filing of Court Order with ROC by both the Companies

Both the transferor and transferee companies should obtain the Court‘s order
sanctioning the scheme of amalgamation and file the same with ROC with their
respective jurisdiction as required vide Sec-394(3) of the Companies Act, 1956
within 30 days after the date of the Court‘s Order in Form No-21 prescribed under
the (Central Government‘s) General Rules and Forms, 1956. The amalgamation will
be given effect to from the date on which the High Court‘s Order is filed with the
Registrar.
18. Transfer of the Assets & Liabilities

Section-394(2) vests power in the High Court to order for the transfer of any
property or liabilities from Transferor Company to Transferee Company. In
pursuance of and by virtue of such order such properties and liabilities of the

transferor shall automatically stand transferred to transferee company without any

further act or deed from the date the Court‘s Order is filed with ROC.
19. Allotment of Shares to Shareholders of Transferor Company

Pursuant to the sanctioned scheme of amalgamation, the shareholders of the
transferor company are entitled to get shares in the transferee company in the
exchange ratio provided under the said scheme. There are three different situations
in which allotment could be given effect:-
i) Where transferor company is not a listed company, the formalities prescribed

under listing agreement do not exist and the allotment could take place without
setting the record date or giving any advance notice to shareholders except asking
them to surrender their old share certificates for exchange by the new ones ;
ii) The second situation will emerge different where Transferor Company is a listed
company. In this case, the stock exchange is to be intimated of the record date
by giving at least 42 days notice or such notice as provided in the listing
agreement.
20. Listing of the Shares at Stock Exchange

After the amalgamation is effected, the company which takes over the assets and
liabilities of the transferor company should apply to the stock exchanges where its
securities are listed, for listing the new shares allotted to the shareholders of the
transferor company.
21. Court order to be annexed to Memorandum of Transferee Company

It is the mandatory requirement vide Sec-391(4) of the Companies Act, 1956 that
after the certified copy of the Court‘s Order sanctioning the scheme of
amalgamation is filed with Registrar, it should be annexed to every copy of the
Memorandum issued by the transferee company. Failure to comply with
requirement renders the company and its officers liable to punishment.
22. Preservation of Books & Pape rs of Amalgamated Company

Sec-396A of the Act requires that the books and papers of the amalgamated
company should be preserved and not be disposed of without prior permission of the
Central Government.
23. The Post Merger Secretarial Obligations

There are various formalities to be complied with after amalgamation of the
companies is given effect to and allotment of shares to the shareholders of the
transferor company is over. These formalities include filing of the returns with
Registrar of Companies, transfer of investments of transferor company in; the name
of the transferee, intimating banks and financial institutions, creditors and debtors
about the transfer of the transferor company‘s assets and liabilities in the name of
the transferee company, transfer of employees, gratuity, PF and Pension funds etc.
24. Withdrawal of the Sche me not Permissible

Once the scheme for merger has been approved by requisite majority of
shareholders and creditors, the scheme cannot be with-drawn by subsequent
meeting of shareholders by passing Resolution for withdrawal of the petition
submitted to the court U/s-391 for sanctioning the scheme.

Different aspects of Mergers and Acquisition
Accounting Aspects of Merger
Introduction
This standard deals with accounting for amalgamations and the treatment of any
resultant goodwill or reserves. This standard is directed principally to companies
although some of its requirements also apply to financial statements of other
enterprises.
This standard does not deal with cases of acquisitions which arise when there is a
purchase by one company of the whole or part of the shares, or the whole or part of
the assets, of another company in consideration for payment in cash or by issue of
shares or other securities in the acquiring company or partly in one form and partly
in the other. The distinguishing feature of an acquisition is that the acquired
company is not dissolved and its separate entity continues to exist.
Definitions
The following terms are used in this statement with the meanings specified:
a) Amalgamation means an amalgamation pursuant to the provisions of the
Companies Act, 1956 or any other statute which may be applicable to
companies.
b) Transferor Company means the company which is amalgamated into another

company.
c) Transferee company means the company into which a transferor company is

amalgamated.
d) Reserve means the portion of earnings, receipts or other surplus of an enterprise
(whether capital or revenue) appropriated by the management for a general or a
specific purpose other than a provision for depreciation or diminution in the
value of assets or for a known liability.

e) Amalgamation in the nature of merger is an amalgamation which satisfies all the

following conditions.
(i) All the assets and liabilities of the transferor company become, after
amalgamation, the assets and liabilities of the transferee company.
(ii) Shareholders holding not less than 90% of the face value of the equity shares of
the transferor company (other than the equity shares already held therein,
immediately before the amalgamation, by the transferee company or its
subsidiaries or their nominees) become equity shareholders of the transferee
company by virtue of the amalgamation.
(iii) The consideration for the amalgamation receivable by those equity shareholders
of the transferor company who agree to become equity shareholders of the
transferee company is discharged by the transferee company wholly by the issue
of equity shares in the transferee company, except that cash may be paid in
respect of any fractional shares.
(iv) The business of the transferor company is intended to be carried on, after the
amalgamation, by the transferee company.
(v) No adjustment is intended to be made to the book values of the assets and
liabilities of the transferor company when they are incorporated in the financial
statements of the transferee company except to ensure uniformity of accounting
policies.
f) Amalgamation in the nature of purchase is an amalgamation which does not

satisfy any one or more of the conditions specified in sub-paragraph (e) above
g) Consideration for the amalgamation means the aggregate of the shares and other
securities issued and the payment made in the form of cash or other assets by the
t
transferee company to the shareholders of the transferor company.

h) Fair value is the amount for which an asset could be exchanged between a
knowledgeable, willing buyer and a knowledgeable, willing seller in an arm‘s
length
transaction.
i) Pooling of interests is a method of accounting for amalgamations the object of
which
is to account for the amalgamation as if the separate businesses of the
amalgamating companies were intended to be continued by the transferee
company. Accordingly, only minimal changes are made in aggregating the
individual financial statements of the amalgamating companies.
Methods of Accounting for Amalgamations

There are two main methods of accounting for amalgamations:
1. The Pooling of Interests Method

Under the pooling of interests method, the assets, liabilities and reserves of the
transferor company are recorded by the transferee company at their existing
carrying amounts.
If, at the time of the amalgamation, the transferor and the transferee companies have
conflicting accounting policies, a uniform set of accounting policies is adopted
following the amalgamation. The effects on the financial statements of any changes
in accounting policies are reported in accordance with Accounting Standard (AS) 5,
Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting
Policies.
2. The Purchase Method

Under the purchase method, the transferee company accounts for the
amalgamation either by incorporating the assets and liabilities at their existing
carrying amounts or by allocating the consideration to individual identifiable
assets and liabilities of the transferor company on the basis of their fair values at
the date of amalgamation. The identifiable assets and liabilities may include
assets and liabilities not recorded in the financial statements of the transferor
company.
Where assets and liabilities are restated on the basis of their fair values, the
determination of fair values may be influenced by the intentions of the transferee
company. For example, the transferee company may have a specialized use for an
asset, which is not available to other potential buyers. The transferee company may
intend to effect changes in the activities of the transferor company which necessitate
the creation of specific provisions for the expected costs, e.g. planned employee
termination and plant relocation costs.
Treatment of Goodwill Arising on Amalgamation
Goodwill arising on amalgamation represents a payment made in anticipation of

future income and it is appropriate to treat it as an asset to be amortized to income
on a systematic basis over its useful life. Due to the nature of goodwill, it is
frequently difficult to estimate its useful life with reasonable certainty. Such
estimation is, therefore, made on a prudent basis. Accordingly, it is considered
appropriate to amortize goodwill over a period not exceeding five years unless a
somewhat longer period can be justified.
Factors which may be considered in estimating the useful life of goodwill arising on
amalgamation include:
(a) The foreseeable life of the business or industry;
(b) The effects of product obsolescence, changes in demand and other economic
factors;
(c) The service life expectancies of key individuals or groups of employees;
(d) Expected actions by competitors or potential competitors; and
(e) Legal, regulatory or contractual provisions affecting the useful life.
Balance of Profit and Loss Account
In the case of an ‗amalgamation in the nature of merger‘, the balance of the Profit
and Loss Account appearing in the financial statements of the transferor company is
aggregated with the corresponding balance appearing in the financial statements of

the transferee company. Alternatively, it is transferred to the General Reserve, if

any.
In the case of an ‗amalgamation in the nature of purchase‘, the balance of the Profit
and Loss Account appearing in the financial statements of the transferor company,
whether debit or credit, loses its identity.
Amalgamation after the Balance Sheet Date
When an amalgamation is effected after the balance sheet date but before the
issuance of the financial statements of either party to the amalgamation, disclosure
is made in accordance with AS 4, ‗Contingencies and Events Occurring After the
Balance Sheet Date‘, but the amalgamation is not incorporated in the financial
statements. In certain circumstances, the amalgamation may also provide additional
information affecting the financial statements themselves, for instance, by allowing
the going concern assumption to be maintained.

Tax aspect
An amalgamation involves the merger of one or more company into a existing

company of merger of two or more company into a new company form specifically
for this purpose. The merging companies are cold amalgamating companies and the
merged company is called amalgamated company. The amalgamated company is
entitling to various tax benefits, if the following condition is fulfilled.
1. All the properties and liabilities of amalgamating company immediately before

the
amalgamation become the properties and liabilities of amalgamated company by
the
virtue of amalgamation
2. Shareholders holding more than 90% in value of the shares in the amalgamating
company become shareholders of the amalgamated company by the virtue of the
amalgamation.
Tax concessions are granted to the amalgamated company only if the amalgamating
company is an Indian company. Following deduction to the extend available to the
amalgamating company and remaining unabsorbed or unfulfilled will be available
to the amalgamating company
1. capital expenditure on scientific research

2. expenditure on acquisition of patent right or copyright, know-how
3. expenditure on obtaining license to operate telecommunication service
4. amortization of preliminary expenses
5. carry forward of losses and unabsorbed depreciation
Subject to certain circumstances transfer of capital assets by the amalgamating

company to the amalgamated company neither is nor treated as transfer for the
purpose of computing capital gains.

Of the above benefits the most important is the one relenting to the carry forward of
the losses and unabsorbed depreciation of the amalgamating company. Generally,
accumulate losses and unabsorbed depreciation of an assessee cannot be carried and
set of by another assessee. However, as an acceptation, carry forward and setoff is
available in case of amalgamation, subject to the fulfillment of following condition.
1. The amalgamating company owns an industrial undertaking or a ship.

2. The amalgamated company continues to hold at least 3/4th of the book value of
the
fixed asset of the amalgamating company for the period of 5 years from the
effective date of amalgamation.
3. The amalgamated company continues the business of the amalgamating
company
for a minimum period of 5 years.
4. The amalgamated company achieves a level of production at least 50% of
installed capacity of the said undertaking before the end of 4 years from the date
of amalgamation and continuous to maintain the said minimum level of
production till the end of 5 years from the date of amalgamation.
On the fulfillment of above condition, the unabsorbed business losses and unabsorbed
depreciation of the amalgamated company are deemed to be the loss or depreciation
of the amalgamated company for the year of amalgamation thus resulting in a fresh
lease of 8 years for set off or carry forward.

Legal Aspect
Companies Act, 1956, Chapter V
The Companies Act, 1956 has provided for a set of provisions specially dealing
with
Amalgamation of companies, to facilitate the transactions. The statutory provisions
relating to Merger and Amalgamations are contained in Sections 390 to 396A of the
Companies Act, 1956.Sections 390 to 396 of the Companies Act, 1956 govern
Rearrangements including Mergers, Amalgamations and Demergers.
Section 390
This section includes interpretation of Sections 391 and 393. Company means any
company liable to be wound up-arrangement includes a reorganization of the share
capital of the company by the consolidation of shares of different classes or by
division into or by both methods-
Section 391
This section about power to compromise or make arrangements with creditors and
members
1. Where a compromise or arrangement is proposed
-between a company and creditors/any class or member/any c lass
-the court may on application, order a meeting of in such manner as the court
directs
2. If majority in number representing 3/4 th in value of creditors/members present

and voting either in person or by proxy[where allowed]agree and if sanctioned
by court, shall be binding on all members/creditors and company/ liquidator/
contributories.
3. No effect to court order till the time a certified copy of order is filed with the
Registrar of Companies.

4. A copy of order of the Court to be annexed to every copy of Memorandum of

Association.
5. Default is punishable
6. Stay of suit or proceedings
Section 392
These details about the Power of High Court to enforce compromises and
arrangements
1. Court has the power to supervise and gives directions,
2. If court is satisfied that scheme is not workable; it can order winding up of the
company.
Section 393
According to this section information should be provided as to compromises or

arrangements to the creditors and members.
This section covers the procedures to be followed and the manner in which
information is to be given to the members and creditors.
1. Explanatory Statement with every notice setting forth terms of compromise and
directors' interest-
2. Trustees‘ interest to be disclosed.
3. Statement setting terms and contract to be furnished to members.
Section 394
This includes provisions for facilitating reconstruction and amalgamation of

companies.

1. when an application is made u/s 391 for compromise or arrangement and it is

shown to the court that[a] compromise or arrangement is proposed for the
purpose of a scheme of reconstruction of any company or companies or the
amalgamation of any two or more companies and
2. under scheme whole or any part of undertaking, property or liabilities of any

company concerned in the scheme [ transferor co] is to be transferred to another
co.[transferee co.], court may by order provide for transfer allotment
continuation of legal proceeding dissolution provision for dissenting
shareholders incidental matters
Section 394A
According to this section notice to be given to Central Government for applications

under section 391 and 394.
Section 395
Power and duty to acquire shares of shareholders dissenting from scheme or

contract approved by majority
Section 396
Power of Central Government to provide for amalgamation of companies in national

interest.
Section 396A
Preservation of books and papers of amalgamated company

Objectives of the study:
Primary Objective
To explore the insights of a corporate event named ―Amalgamation‖ which is a major
event by itself and it drags lot of attention and results into many drastic changes in
market valuations of a firm.
Secondary Objectives :
 To study the impact of ―Amalgamation‖ on price and volume before and after
it takes place.
 To verify existence of the abnormality in price and volume of the share as

announcement of ―Mergers & Acquisition‖.
 To analyze the bearing of such abnormality (if it does exists) on the Market
Capitalization and Volumes traded on the stock market a month before and a
month after the ―Amalgamation‖ takes place for all the scripts under study.
 To measure the cumulative impact of ―Amalgamation‖ event and try to

conceive a general trend based on it.

Time-Frame of Data Collection:
In order to check the long run and short run effect of the amalgamation following
different time frames have been devised:
NO. Time Pe riod Time Frame

1. 30 days before source date to 1 day before source SD-30 to SD-1
date
2. 10 days before source date to 1 day before source SD-10 to SD-1
date
3. The source date SD
4. 1 day after source date to 1 day before effective SD+1 to ED-1
date
5. The effective date ED
6. 1 day after effective date to 10 days after the ED+1 to ED+10
effective date
7. 1 day after the effective date to 30 days after the ED+1 to ED+30
effective date
The formulation of the time- frame is same for price and volume effect that we have
studied. The days are counted not as trading days but by normal days (i.e including
closed days on stock market), hence it might be possible that there are different
numbers of trading days for two firms in the time- frame.
Type of Research:
 Causal Research

Data and Sample
The study is constrained to the amalgamation announcements during the years 2007 to
2009. The data have been collected for all publicly listed companies who announced
their amalgamation plans in this specific time period. Out of that data 30 companies
have been selected. Those 30 companies are further bifurcated into 10 sectors. The
data for the companies is collected from Capitaline and Prowess Software. The stock
exchange considered as the market is the Bombay Stock Exchange of India Ltd. All
the data for prices, volumes and indices of the companies is collected from the
website of the Bombay Stock Exchange of India Ltd. (www.bseindia.com).
The following criteria have been considered to select the merger & acquisition
announcement as an eligible one for sample:
 The amalgamation source date is the date on which the stock exchange that is
Bombay Stock Exchange of India Ltd. is informed that the mergers &
acquisitions are approved by the Board of Directors.
 The closing price for days of time-frame decided for a particular firm is
according to what is available on the website of Bombay Stock Exchange of
India Ltd.
 The indices taken for the study of companies is BSE-500.
Type of Sampling:
 Simple Random Sampling

Research Methodology
In this part we will explain you how we have calculated the abnormal return using the
excel worksheet from the data that we got from the www.bseindia.com. We will also
explain you how to read each and every data and information that we collected and
mentioned in the report. Following are the steps:
Steps to find out Abnormal Price Effect
A. Collect data from bseindia.com and send it to Excel worksheet
As we mentioned earlier, we collected daily share price data from bseindia.com and
sent to excel worksheet. The above picture of excel worksheet represents the type of
share price data which is collected for every individual firms. The data that we have
collected include daily share prices, No. of shares, No.of trades etc. which is required
to do analysis. The data is collected for all firms as per the time- frame decided earlier.

As we have taken BSE-500 indices as base, we also collected daily indices for the
specific years required in analysis.
B. Find out daily script return
After collecting data, process of analyzing the data starts. Here, we need to find out
daily script return of each day. It is difference between two consecutive days closing
price divided by the first day‘s closing price. We can find out easily by seeing the
above picture. The script return 1.32% is difference between closing price of two
consecutive days i.e. 4th and 5th June 2008 divided by the 4th June‘s closing price.

C. Find out daily market return
To find out daily market return we used the same formula as we have used in finding
out daily script return. Instead of closing price, we have taken BSE 500 indices
closing value. As we can see in above picture, we found out the BSE-500 return by
taking previous day‘s closing as a base. The return that we found out by the formula
mentioned was in terms of numbers but we turned it into percentage to make
meaningful interpretation.
D. Find out the regression between script return and market return
After finding out the daily script return and market return for the event period, the
next step is to find out the regression between script and market return. To find out
the regression we selected the period of 3 months before the source date of the merger
or acquisition to 1 month before the source date of the Amalgamation (SD-90 to SD-
30). This is because we assume that most of the abnormality in trading can start at the

max one month before the amalgamation announcement due to some insider leakage
of information, before that period script tends to react in normal manner. So in my
research that period would be the standard normal period which could be used to find
out expected return.
As we can see in this window the X range indicate BSE 500% market return for the
above mentioned period and Y range indicate script return for the above mentioned
period. Then using the MS Excel Regression analysis tool (which is in the Data menu)
we found out the regression analysis chart which is shown below. [To get the
regression tool go to toolbar, in that go to more commands and select Add-Ins. There
we need to select Analysis Tool Pack which gets installed automatically. Then again
when we go to Data menu, we will find option of Data Analysis. In that, we will find
option of regression.]

Once we feed data in the above model we find out the summary output as mentioned
in the above picture. From the summary that we got, there are three things important
for my research. They are shown here i.e. R-Square, Alpha and Beta. The explanation
of the each of the terms and how to read the data is given below.
R-square:
The R-squared value shows how reliable the dependent variable on independent
variable is. It varies between zero and one. An R-squared value of one indicates
perfect correlation with the index. The higher the R-square, the better correlation
exists between the script return and market return. So that leads to some of good
decision making and helps in proper judgment and interpretation. Generally R-square
of more than 0.50 is considered to be good.

Y-intercept (a): (Alpha)
The ‗a‘ is called the intercept. This is the measure of unsystematic risk or company
risk.
Slope of line (b): (Beta)
The ‗b‘ is called the slope of line. It represents how much each unit change of the
independent variable X changes the dependent variable Y. It is also known as Beta of
script in comparison of market.
Both ‗a‘ and ‗b‘ are numerical constants because for any given straight line, their
values do not change.
E. Find out Expected Return
So from the above figures one can frame a regression lin foe each of the script as
follows:
X=a+bY

Suppose we know that ‗a‘ is 3 and b is ‗2‘. Let us determine what X would be for an
Y equal to 5. When awe substitute the values of a, b and X in the above equation we
find the corresponding value of X to be 13. As mentioned in the above regression line
we found out the expected return for the event period (AD-30 to ED+30). The
formula used can be seen in this above picture of excel worksheet.
F. Find out the Abnormal Return
The abnormal return for a given day can be found out by subtracting expected return
for a day (which is found by using regression line as shown above) from the actual
return for a day (which is found out in step B). This picture represents the same thing.
Positive abnormal return indicate that how much positive effect is generated by the
event among the investors, in the same way negative abnormal return indicate clearly
the opposite scenario for the script. As we can see in this picture the abnormal return
for 5-June-08 is -0.02% because the actual return on the script is 1.32% which is
marginally lower than expected return of 1.34% for that day. This return is for only
one day. The real effect of such event can be seen by taking broader view and seeing
cumulative effect through a particular period.

G. Find out Cumulative Abnormal Return
As mentioned above, to study the long term and short term effect of the event, we
have divided the event period in different windows. So, to check the cumulative effect
of the abnormal return in a given time window can be found out by calculating
cumulative abnormal return for that period.
So, we have found out the

cumulative abnormal return for
each time window by using the
formula which can be seen in the
formula bar shown in the picture
of worksheet. The detail of
cumulative abnormal return for
each script is shown in the next
chapter.
H. Find out Cumulative Abnormal Return for a given Time Window
From the picture of worksheet shown below we can see how to find out cumulative
abnormal return for a given time window. As we can see in window SD-30 to SD-1,
the cumulative abnormal return is -0.07% , so there is negative abnormality in return
can be seen one month before the amalgamation was announced but we can see in
other window SD-10 to SD-1 that the cumulative abnormal return has become
positive i.e. 2.40% which indicates some kind of leakage in information must be done

before the amalgamation was actually announced. In the same we can observe
cumulative abnormal return (CAR) for different window.
In order to draw overall inferences for the event of interest, the abnormal return
observations are aggregated along two dimensions-through times and across
securities. The following measures of abnormal performance are used:

 Cumulative Abnormal Return (CAR): cumulative sum of stock I‘s prediction

error (abnormal returns) over the window (t1 ,t2 )
𝒕𝟐
CARi (t1,t2)=1/T 𝒋=𝒕𝟏 ARij
 Average Abnormal Return (AAR): stock i‘s cumulative abnormal return divided
by the number of days in the window (t1 ,t2 )
AARi (t1,t2)= CARi (t1,t2) / ni (t1,t2)
 Mean Cumulative Abnormal Return (MCAR): average of the cumulative

abnormal returns across observations (firms), it is a measure of the abnormal
performance over the event period.
𝑵
MCAR (t1, t2) = 1/N 𝒊=𝟏 CARi (t1, t2)
 Mean Average Abnormal Return (MAAR): sample average of the cumulative

abnormal returns sample average of firm AARs. This measure of abnormal
performance takes into account the fact that the number of days in that window
(t1,t2) may be different across firms and therefore gives a greater weight to the
ARs of firms for which this window is shorter. On the contrary, MCAR gives same
weight to every ARs. This implies that MAAR is more powerful when the
―abnormal behaviour‖ of returns is concentrated in short window, while MCAR is
more powerful in detecting abnormal performance over long window.
𝑵
MAAR (t1, t2) =1/N 𝒊=𝟏 AARi (t1, t2)

Steps to find out Abnormal Volume Effect
A. Find out Average Daily Volume
We found out the abnormal volume trading by using simple average and deviation of
actual volume from the average volume. So to find out abnormal volume the very first
step is to find out average volume. As we assume that there is normal trading takes
place from the 3 months before the announcement date to the 1 month before the
announcement date. So we took the average of that period using simple average
formula as can be seen in this data sheet. The average we get is the daily average
volume and it becomes the benchmark for our study and we can compare the actual
volume with this average volume.

B. Find out Abnormal Volume
To find out abnormal volume trading we subtract average volume from the total
volume for a day given. The abnormal volume can be positive of negative. But in real
life the volume traded can‘t be negative. Here negative abnormal volume indicates
how much less volume trading takes place in comparison to expected volume traded.
C. Find out Cumulative Abnormal Volume

As we have found in cumulative price effect in the same way we can found out the
cumulative volume traded for a given time period. This sheet represents the same
thing. Cumulative abnormal volume is useful as it indicate how much abnormality in
volume can be seen in given window or time period.
D. Find out Cumulative Abnormal Volume for a given Window
As already explain in the price effect, in the same way cumulative abnormal volume
for a given window can be found out using the above mentioned formula. As we can
see that there is huge abnormal volume trading can be seen on announcement date and
dividend date.

4.1 Introduction
In finance, the efficient-market hypothesis (EMH) asserts that financial markets are
"informationally efficient". The weak version of EMH suppose that prices on traded
assets (e.g., stocks, bonds, or property) already reflect all past publicly available
information. The semi-strong version supposes that prices reflect all publicly
available information and instantly change to reflect new information. The strong
version supposes that market reflects even hidden/inside information. There is some
disputed evidence to suggest that the weak and semi-strong versions are valid while
there is powerful evidence against the strong version. Therefore, according to theory,
it is improbable to consistently outperform the market by using any information that
the market already has, except through inside trading. Information or news in the
EMH is defined as anything that may affect prices that is unknowable in the present
and thus appears randomly in the future. The hypothesis has been attacked by cr itics
who blame the belief in rational markets for much of the financial crisis of 2007–
2010, with noted financial journalist Roger Lowenstein declaring "The upside of the
current Great Recession is that it could drive a stake through the heart of the academic
nostrum known as the efficient- market hypothesis."
The efficient- market hypothesis was developed by Professor Eugene Fama at the
University of Chicago Booth School of Business as an academic concept of study
through his published Ph.D. thesis in the early 1960s at the same school. It was widely
accepted up until the 1990s, when behavioral finance economists, who were a fringe
element, became mainstream. Empirical analyses have consistently found problems
with the efficient- market hypothesis, the most consistent being that stocks with low
price to earnings (and similarly, low price to cash- flow or book value) outperform
other stocks. Alternative theories have proposed that cognitive biases cause these
inefficiencies, leading investors to purchase overp riced growth stocks rather than
value stocks. Although the efficient-market hypothesis has become controversial
because substantial and lasting inefficiencies are observed, Beechey et al. (2000)
consider that it remains a worthwhile starting point.

4.2 The Efficient Market Hypothesis
When the term ‗efficient market‘ was introduced into the economics literature thirty
years ago, it was defined as a market which ‗adjusts rapidly to new information‘
(Fama et al 1969).It soon became clear, however, that while rapid adjustment to new
information is an important element of an efficient market, it is not the only one. A
more modern definition is that asset prices in an efficient market ‗fully reflect all
available information‘ (Fama 1991). This implies that the market processes
information rationally, in the sense that relevant information is not ignored, and
systematic errors are not made. As a consequence, prices are always at levels
consistent with ‗fundamentals‘. The words in this definition have been chosen
carefully, but they nonetheless mask some of the subtleties inherent in defining an
efficient asset market. For one thing, this is a strong version of the hypothesis that
could only be literally true if ‗all available information‘ was costless to obta in. If
information was instead costly, there must be a financ ial incentive to obtain it. But
there would not be a financial incentive if the information was already ‗fully
reflected‘ in asset prices (Grossman and Stiglitz 1980). A weaker, but economically
more realistic, version of the hypothesis is therefore that prices reflect information up
to the point where the marginal benefits of acting on the information (the expected
profits to be made) do not exceed the marginal costs of collecting it (Jensen 1978).
Secondly, what does it mean to say that prices are consistent with fundamentals? We
must have a model to provide a link from economic fundamentals to asset prices.
While there are candidate models in all asset markets that provide this link, no-one is
confident that these models fully capture the link in an empirically convincing way.
This is important since empirical tests of market efficiency – especially those that
examine asset price returns over extended periods of time – are necessarily joint tests
of market efficiency and a particular asset-price model.When the joint hypothesis is
rejected, as it often is, it is logically possible that this is a consequence of deficiencies
in the particular asset-price model rather than inthe efficient market hypothesis. This
is the ‗bad model‘ problem (Fama 1991).

Finally, a comment about the word ‗efficient‘. It appears that the term was originally
chosen partly because it provides a link with the broader economic concept of
efficiency in resource allocation. Thus, Fama began his 1970 review of the efficient
market hypothesis (specifically applied to the stockmarket):
The primary role of the capital [stock] market is allocation of ownership of

theeconomy‘s capitalstock. In general terms, the ideal is a market in which
pricesprovide accurate signals for resource allocation: that is, a market in which firms
can make production-investment decisions, and investors can choose among the
securities that represent ownership of firms‘ activities under the assumption that
securities prices at any time ‗fully reflect‘ all available information.The link between
an asset market that efficiently reflects available information (atleast up to the point
consistent with the cost of collecting the information) and its role in effic ient resource
allocation may seem natural enough. Further analysis has made it clear, however, that
an informationally efficient asset market need not generate allocative or production
efficiency in the economy more generally. The two concepts are distinct for reasons to
do with the incompleteness of markets and the information-revealing role of prices
when information is costly, and therefore valuable (Stiglitz 1981).
4.3 Predictions of Efficient Market Hypothesis
The efficient market hypothesis yields a number of interesting and testable predictions
about the behaviour of financial asset prices and returns. Consequently, a vast amount
of empirical research has been devoted to testing whether financial markets are
efficient. While the ‗bad model‘ problem plagues some of this research, it is possible
to draw important conclusions about the informational efficiency of financial markets
from the existing body of empirical research. This section presents a selective survey
of the evidence. Our conclusions are summarised in the table and explained in more
detail in the pages that follow.

1. BANCO PRODUCTS (INDIA) LTD.
Abnormal Return (Price): (In Percentage)

Mean
SD-30 SD-10 SD+1 to ED+1 to ED+1 to Daily AB.
to SD-1 to SD-1 SD ED-1 ED ED+10 ED+30 Return
Cum.AB
Return 60.02% 8.21% 2.37% 608.22% 3.40% 14.22% 86.30% 1.53%
Banco Products (India) Ltd.
700.00% 608.22%
600.00%
500.00%
%Cum.AB Return
400.00%
300.00%
200.00%
86.30%
60.02%
100.00% 3.40% 14.22%
8.21% 2.37%
0.00%
SD-30 SD-10 SD SD+1- ED ED+1- ED+1-
TO SD- TO SD-1 ED-1 ED+10 ED+30
01
AB.Return 60.02% 8.21% 2.37% 608.22% 3.40% 14.22% 86.30%
Time Period


800.00%
ED+30
700.00% ED+10
ED
600.00%
% Cum. AB. Return
500.00%
400.00%
300.00%
200.00%
100.00% SD-10
SD
0.00% SD-30
Days
Inte rpretation:
Here we can see that before the amalgamation announced there was not much good
return but after the source date it started to become more positive. Here we can see in
the above chart that the line for return is going upwards. Big positive cumulative
abnormal return is there between the source date and effective date. The above chart
does not indicate the perfect trend line for the company. So it is good script for the
investors as it generates good positive cumulative abnormal return throughout the
event period.

Abnormal Return (Volume):
SD-30 to SD-10 to SD+1 to ED+1 to ED+1 to

No SD-1 SD-1 SD ED-1 ED ED+10 ED+30
- 6647926.
1 Cum. Ab 3626258.45 1034868.41 104890.77 3468865.09 -7245.23 283267.86 91
2 Days 30.00 10.00 1.00 607.00 1.00 10.00 30.00
Ave.Daily 221597.5
3 Ab (1/2) 120875.28 103486.84 104890.77 -5714.77 -7245.23 28326.79 6
4 Ave.Vol. 32104.23
Ab/Ave
5 (3/4) 3.77 3.22 3.27 -0.18 -0.23 0.88 6.90

6.90
7.00
6.00
5.00
Ratio of AB Vol to Avg. Vol
3.77
4.00 3.27
3.22
3.00
2.00
0.88
1.00
0.00
-0.18 -0.23
-1.00
SD-30 SD-10 SD SD+1 ED ED+1 ED+1
TO TO TO TO TO
SD-1 SD-1 ED-1 ED+10 ED+30
AB.Volume 3.77 3.22 3.27 -0.18 -0.23 0.88 6.90

Inte rpretation:
As we can see that there is big amount of abnormality in volume on source date and
effective date. This could be due to great amount of liquidity in script and also
because price is such that small investors tempted to invest in it. Such situation can be
seen throughout after the amalgamation takes place. But as we can see that there is big
fall in AB volume between source date and effective date. This is indication that
investors are waiting for amalgamation to happen to make any further investment in
the company.

Calculation of 5-day Moving Average of Closing price for 21 Days

Effective date - 18/09/09
Pre-acquisition
Date Price
20 August 2009 34.75
21 August 2009 35.30
24 August 2009 35.70 36.01
25 August 2009 36.55 37.36
26 August 2009 37.75 38.94 38.73
27 August 2009 41.50 40.14 39.904
28 August 2009 43.20 41.2 40.778 40.5092
31 August 2009 41.70 41.88 41.332 41.1984
1 September 2009 41.85 41.73 41.802 41.7328 41.66648
2 September 2009 41.15 41.71 42.176 42.2072 42.19104
3 September 2009 40.75 42.49 42.576 42.6848 42.65712 42.60
4 September 2009 43.10 43.07 43.15 43.132 43.07296
7 September 2009 45.60 43.88 43.72 43.5288 43.4116
8 September 2009 44.75 44.6 44.038 43.812
9 September 2009 45.20 44.56 44.16 43.9004
10 September 2009 44.35 44.08 43.992
11 September 2009 42.90 43.68 43.592
14 September 2009 43.20 43.04
15 September 2009 42.75 42.6
16 September 2009 42.00
17 September 2009 42.15

Calculation of 5-Day Moving Ave rage Of Closing Price For 21 Days

Post-acquisition
Date Price
22 September 2009 43.25
23 September 2009 44.70
24 September 2009 45.50 45.07
25 September 2009 45.90 45.81
29 September 2009 46.00 46.12 45.766
30 September 2009 46.95 46.05 45.834
1 October 2009 46.25 45.78 45.75 45.7388
5 October 2009 45.15 45.41 45.636 45.8632
6 October 2009 44.55 45.39 45.708 46.2804 46.7888
7 October 2009 44.15 45.55 46.388 47.2036 47.91752
8 October 2009 46.85 46.41 47.92 48.858 49.67112 50.31
9 October 2009 47.05 49.18 50.366 51.3824 52.08336
12 October 2009 49.45 53.07 53.908 54.6312 55.07496
14 October 2009 58.40 57.62 58.33 58.3416
15 October 2009 63.60 63.26 62.632 62.1616
16 October 2009 69.60 68.52 66.472
17 October 2009 75.25 70.69 69.466
20 October 2009 75.75 72.27
21 October 2009 69.25 72.59
22 October 2009 71.50
23 October 2009 71.20

Chart showing comparison of Average Closing Prices Pre-acquisition and Post-

acquisition of Banco Products (India) Ltd.
Pre-acquisition 42.60
Post-acquisition 50.31
52
50 50.31
48
46
44
42.6
42
40
38
Pre Post
Inte rpretation:
On the basis of calculations & Graphical presentation, it is derived that the Pre
merger average share price was 42.60 which increased to 50.31 after merger. It
shows that the Shareholders‘ wealth has increased and the Company‘s market
value has also increased. Therefore we can say that the merger decision is
beneficiary to the Company and it is a successful merger.

2. JAMNA AUTO INDUSRIES LTD.

Mean
SD-30 SD-10 SD+1 ED+1 ED+1 Daily
to SD- to SD- to ED- to to AB.
1 1 SD 1 ED ED+10 ED+30 Return
Cum.AB
Return 0.50% -8.10% 5.34% 43.25% -8.47% 19.16% 27.94% 0.29%
Jamna Auto Industries Ltd.
50.00%
43.25%
40.00%
%Cum.AB Return
27.94%
30.00%
19.16%
20.00%
10.00% 5.34%
0.50%
0.00%
-10.00% -8.10% -8.47%

SD-30 SD-10 SD SD+1-E ED ED+1- ED+1-E
TO SD- TO SD- D-1 ED+10 D+30
01 1
AB.Return 0.50% -8.10% 5.34% 43.25% -8.47% 19.16% 27.94%
Time Period

Jamna Auto Indusries Ltd.

90.00%
80.00%
ED+30
70.00%
% Cum. AB. Return
60.00%
ED+10
50.00%
40.00% ED
30.00%
20.00%
10.00%
SD-10
0.00% SD
-10.00%
SD-30
-20.00%
Days
Inte rpretation:
We can see that before the amalgamation was announced there was positive
cumulative abnormal return. But it falls between source date and effective date. The
above chart does not predict perfect trend line for the company. But in the long run
Cum. AB return tends to remain positive. We can see another positive Cum. AB
return immediately after amalgamation took place. So it is s good script for the
investors as it generates good positive Cum. AB return throughout the event period.


- - -
1 Cum. Ab 94568.40 41749.40 5616.20 1325457.20 1630.80 21746.40 84005.40
2 Days 30.00 10.00 1.00 208.00 1.00 10.00 30.00
Ave.Daily -
3 Ab (1/2) -3152.28 -4174.94 5616.20 6372.39 1630.80 2174.64 2800.18
4 Ave.Vol. 12191.20
Ab/Ave
5 (3/4) -0.26 -0.34 -0.46 0.52 0.13 0.18 0.23
0.60 0.52
0.50
Ratio of AB Volume to Ave. Volume
0.40
0.30 0.23
0.18
0.20 0.13
0.10
0.00
-0.10
-0.20
-0.30 -0.26
-0.40 -0.34
-0.50 -0.46
TO SD- TO SD- TO ED- TO TO
1 1 1 ED+10 ED+30
AB.Volume -0.26 -0.34 -0.46 0.52 0.13 0.18 0.23

Inte rpretation:
As we can see that there is a big amount of abnormality in volume on source date and
effective date. This could be due to great amount of liquidity in the script. Such
situation can be seen throughout after the amalgamation takes place. But as we can
see that there is positive abnormality in the turnover after the effective date. It is
noteworthy that before announcement return was negative but between announcement
and effective date it is generating positive return. In the long run also return tends to
be positive so it is a good script to invest in.

Calculation of 5-day moving ave rage of Closing price for 21 days

Pre-acquisition – Closing Price
Date Price
20 December 2007 74
24 December 2007 76
26 December 2007 77 76.2
27 December 2007 77 78.4
28 December 2007 77 81 80.4
31 December 2007 85 82.8 82.04
1 January 2008 89 83.6 83.16 82.344
2 January 2008 86 84.4 83.36 82.6
3 January 2008 81 84 82.76 82.208 81.6176
4 January 2008 81 82 81.68 81.184 80.7712
7 January 2008 83 79.8 80.08 79.752 79.5312 79.28
8 January 2008 79 78.2 78.04 78.112 78.032
9 January 2008 75 76.4 76.2 76.4 76.424
10 January 2008 73 73.8 74.56 74.712
11 January 2008 72 72.8 73.12 73.144
14 January 2008 70 71.6 71.64
15 January 2008 74 71 70.2
16 January 2008 69 69
17 January 2008 70 66.6
18 January 2008 62
21 January 2008 58

Calculation of 5-moving average of Closing price for 21 days

Post-acquisition
Date Price
22 January 2008 49
23 January 2008 56
24 January 2008 59 57.4
25 January 2008 60 60
28 January 2008 63 60.4 59.88
29 January 2008 62 60.6 60.88
30 January 2008 58 61 61.72 61.984
31 January 2008 60 62.4 62.92 63.264
1 February 2008 62 64.2 64.52 64.528 64.3552
4 February 2008 70 66.4 66.28 65.632 65.2576
5 February 2008 71 68.6 67.2 66.368 65.784 65.35
6 February 2008 69 69.8 67.24 66.496 65.8608
7 February 2008 71 67 66.6 65.896 65.5072
8 February 2008 68 64.4 65.16 64.912
11 February 2008 56 63.2 63.28 63.864
12 February 2008 58 61.4 62.28
13 February 2008 63 60.4 62
14 February 2008 62 62
15 February 2008 63 63
18 February 2008 64
19 February 2008 63

Chart showing comparison of average high prices pre and post-acquisition of

90
80 79.28
70
65.35
60
50
40
30
20
10
0
Pre post
Inte rpretation:
merger average share price was 79.28 which decreased to 65.35 after merger. It
shows that the Shareholders‘ wealth has decreased and the Company‘s Market
value has also decreased. Therefore we can say that the merger decision is not
beneficial to the Company.

3. MAHINDRA & MAHINDRA LTD.
Mean
Daily
SD-30 SD-10 SD+1 ED+1 to ED+1 to AB.
to SD-1 to SD-1 SD to ED-1 ED ED+10 ED+30 Return
Cum.AB
Return 4.59% -4.24% 0.39% 31.55% 0.78% 7.88% 26.37% 0.31%
Mahindra & Mahindra Ltd.

35.00% 31.55%
30.00% 26.37%
25.00%
%Cum.AB Return
20.00%
15.00%
10.00% 7.88%
4.59%
5.00%
0.39% 0.78%
0.00%
-5.00% -4.24%
TO SD- TO ED-1 ED+10 ED+30
01 SD-1
AB.Return 4.59% -4.24% 0.39% 31.55% 0.78% 7.88% 26.37%
Time Period


70.00%
ED+30
60.00%
50.00%
ED+10
% Cum.AB.Return
40.00%
ED
30.00%
20.00%
SD-10
10.00%
SD
0.00%
SD-30
-10.00%
-20.00%
Days
Inte rpretation:
We can see that before the amalgamation was announced there was quite positive
Cum. AB return. After the effective date it remains positive for some time but then it
falls substantially and fluctuates for some period of time. In the long run the Cum. AB
return tends to remain positive substantially. The above chart does not indicate perfect
trend line for the company. So it is a good script for the investor as it generates fairly
good positive Cum. AB return throughout the event period.


-
1 Cum. AB 1848046.02 173059.22 128335.68 5934823.46 231089.68 1143711.78 3244096.61
2 Days 30.00 10.00 1.00 200.00 1.00 10.00 30.00
Ave.Daily
3 AB (1/2) 61601.53 -17305.92 128335.68 29674.12 231089.68 114371.18 108136.55
4 Ave.Vol. 72400.32
Ab/Ave
5 (3/4) 0.85 -0.24 1.77 0.41 3.19 1.58 1.49

3.50 3.19
3.00
2.50
2.00 1.77
1.58 1.49
1.50
0.85
1.00
0.41
0.50
0.00
-0.24
-0.50
TO SD-1 TO SD-1 TO ED-1 TO TO
ED+10 ED+30
AB.Volume 0.85 -0.24 1.77 0.41 3.19 1.58 1.49

Inte rpretation:
effective date. This could be due to great amount of liquidity in script and price could
be such that small investors tempted to invest in it. Such situation can be seen
throughout after the amalgamation takes place. Here we can see that there is big
positive turnover throughout the period windows. This shows the investors‘
confidence in the scrip because of various factors attached to it.


Date Price
15 January 2009 319
16 January 2009 324
19 January 2009 309 309.4
20 January 2009 300 303
21 January 2009 295 291 293.44
22 January 2009 287 283.6 287.6
23 January 2009 264 280.2 283.56 286.4
27 January 2009 272 280.2 282.96 285.024
28 January 2009 283 282.8 284.44 285.008 285.626
29 January 2009 295 288 286.56 285.68 285.435
30 January 2009 300 291 287.52 286.016 285.198 284.88
2 February 2009 290 290.8 286.92 285.448 284.581
3 February 2009 287 285 284.64 283.84 283.56
4 February 2009 282 279.8 281.6 281.92
5 February 2009 266 276.6 278.52 280.576
6 February 2009 274 275.8 277.92
9 February 2009 274 275.4 280.2
10 February 2009 283 282
11 February 2009 280 291.2
12 February 2009 299


Post-acquisition
Date Price
19 February 2009 290 289.6
20 February 2009 281 293.6
24 February 2009 295 300.8 300.08
25 February 2009 318 304.6 305.2
26 February 2009 320 311.8 309.36 307.992
27 February 2009 309 315.2 311.72 310.784
2 March 2009 317 314.4 313.6 312.64 312.262
3 March 2009 312 312.6 314.04 314.024 314.406
4 March 2009 314 314 314.48 315.872 316.888 317.72
5 March 2009 311 314 316.28 318.712 320.237
6 March 2009 316 317.4 320.96 323.192 324.805
9 March 2009 317 323.4 327.8 329.384
12 March 2009 329 336 336.44 336.864
13 March 2009 344 348.2 345.44
16 March 2009 374 357.2 353.68
17 March 2009 377 362.4
18 March 2009 362 364.6
19 March 2009 355
20 March 2009 355


330
320 317.72
310
300
290
284.48
280
270
260
Pre Post
Inte rpretation:
merger average share price was 284.48 which increased to 317.72 after merger.
It shows that the Shareholders‘ wealth has increased and the Company‘s Market
value has also increased. Therefore we can say that the merger is beneficiary to
the Company and it is a successful merger.

4. HDFC BANK LTD.
Mean
Daily
SD-30 to SD-10 SD+1 to ED+1 to ED+1 to AB.
SD-1 to SD-1 SD ED-1 ED ED+10 ED+30 Return
Cum.AB
Return -2.57% -3.35% -4.34% 0.77% 1.33% -2.14% -10.36% -0.12%
HDFC Bank Ltd.

2.00% 1.33%
0.77%
0.00%
-2.00%
%Cum.AB Return
-2.14%
-2.57%
-4.00% -3.35%
-4.34%
-6.00%
-8.00%
-10.00%
-10.36%
-12.00%
TO SD- TO SD-1 D-1 ED+10 D+30
01
AB.Return -2.57% -3.35% -4.34% 0.77% 1.33% -2.14% -10.36%
Time Period

HDFC Bank Ltd.

5.00%
SD-30
SD-10
0.00%
% Cum.AB.Return
-5.00%
SD ED+10
ED
-10.00%
ED+30
-15.00%
-20.00%
Days
Inte rpretation:
We can see that before the amalgamation was announced there was quite negative
Cum. AB return. After the effective date it remains negative for some time but then it
rose substantially between source date and effective date. In the long run the Cum.
AB return tends to remain negative. The above chart does not indicate perfect trend
line for the company. So it is a poor script for the investor as it generates negative
Cum. AB return throughout the event period.


- - -
1 Cum. Ab 448875.50 389301.14 615022.98 84690.33 6156.98 148398.14 712928.50
2 Days 30.00 10.00 1.00 87.00 1.00 10.00 30.00
Ave.Daily
3 Ab (1/2) 14962.52 -38930.11 615022.98 -973.45 6156.98 -14839.81 23764.28
4 Ave.Vol. 97597.02
5 Ab/Ave (3/4) 0.15 -0.40 6.30 -0.01 0.06 -0.15 0.24
HDFC Bank Ltd.

7.00 6.30
6.00
5.00
4.00
3.00
2.00
1.00 0.24
0.15 0.06
0.00
-0.01 -0.15
-0.40
-1.00
TO TO TO TO TO
SD-1 SD-1 ED-1 ED+10 ED+30
AB.Volume 0.15 -0.40 6.30 -0.01 0.06 -0.15 0.24

Inte rpretation:
effective date. This could be due to great amount of liquidity in script. Such situation
can be seen throughout after the amalgamation takes place. Here we can see that there
is big rise in AB volume turnover between source date and effective date but then is
falls substantially. This is the indication that investors are waiting for amalgamation
to take place to make any further investment in the company.


Date Price
22 April 2008 1,487
23 April 2008 1,442
24 April 2008 1,446 1478
25 April 2008 1,498 1490
28 April 2008 1,517 1504.4 1504.84
29 April 2008 1,547 1522.8 1515.92
30 April 2008 1,514 1529 1524.4 1520.58
2 May 2008 1,538 1533.4 1529.76 1524.13
5 May 2008 1,529 1532.4 1527.96 1523.76 1519.88
6 May 2008 1,539 1531.2 1522.6 1519.42 1516.28
7 May 2008 1,542 1513.8 1514.08 1511.51 1510.2 1508.66
8 May 2008 1,508 1502.2 1502.68 1502.58 1502.56
9 May 2008 1,451 1490.8 1490.24 1493.75 1494.38
12 May 2008 1,471 1475.4 1483.32 1485.55
13 May 2008 1,482 1469 1478.44 1478.49
14 May 2008 1,465 1479.2 1473.08
15 May 2008 1,476 1477.8 1467.36
16 May 2008 1,502 1464
20 May 2008 1,464 1446.8
21 May 2008 1,413
22 May 2008 1,379

Calculation of 5-day moving ave rage of closing price for 21 days

Post acquisition
Date Price
23 May 2008 1,383
26 May 2008 1,347
27 May 2008 1,331 1347.2
28 May 2008 1,351 1342
29 May 2008 1,324 1333.8 1328.76
30 May 2008 1,357 1324 1315.44
2 June 2008 1,306 1296.8 1298.36 1294.816
3 June 2008 1,282 1280.6 1278 1275.712
4 June 2008 1,215 1256.6 1253.52 1255.224 1254.757
5 June 2008 1,243 1232 1233.24 1234.152 1235.206
6 June 2008 1,237 1201.6 1213 1213.88 1216.658 1218.53
9 June 2008 1,183 1195.4 1193 1197.064 1199.989
10 June 2008 1,130 1179.4 1176.64 1182.968 1186.053
11 June 2008 1,184 1156.6 1169.44 1171.88
12 June 2008 1,163 1150.2 1162.76 1164.472
13 June 2008 1,123 1165.6 1157.56
16-Jun-08 1,151 1162 1155.96
17 June 2008 1,207 1153.4
18 June 2008 1,166 1148.6
19 June 2008 1,120
20 June 2008 1,099

Chart showing comparison of average closing prices pre and post-acquisition of

HDFC Bank Ltd.
Pre -acquisition 1508.66

Post -acquisition 1218.53
1600
1508.66
1400
1200 1218.53
1000
800
600
400
200
0
Pre Post
Inte rpretation:
merger average share price was 1508.66 which decreased to 1218.53 after
merger. It shows that the Shareholders‘ wealth has decreased and the
Company‘s Market value has also decreased. Therefore we can say that the merger
decision is not beneficial to the Company.

5. FUTURE CAPITAL HOLDINGS LTD.
Mean
Daily
SD-30 SD-10 SD+1 to ED+1 to ED+1 to AB.
Cum.
AB - - -
Return 13.76% 0.91% 1.09% 91.61% 0.94% 2.89% 3.23% 0.44%
Future Capital Holdings Ltd.
100.00% 91.61%
80.00%
%Cum.AB Return
60.00%
40.00%
20.00%
0.91% 2.89% 3.23%
0.00%
-1.09% -0.94%
-20.00% -13.76%
SD-30 SD-10 SD SD+1- ED ED+1- ED+1-E
TO SD- TO SD- ED-1 ED+10 D+30
01 1
AB.Return -13.76% 0.91% -1.09% 91.61% -0.94% 2.89% 3.23%
Time Period

Futuer Capital Holdings Ltd.

100.00%
ED+30
80.00%
ED ED+10
60.00%
% Cum.AB.Return
40.00%
20.00%
0.00% SD-30
SD
-20.00% SD-10
-40.00%
Days
Inte rpretation:
Cum. AB return. Between the source date and effective date it remains positive for
long period of time but then it starts to become stagnant and remain positive. In the
long run the Cum. AB return tends to remain positive. The above chart does not
indicate perfect trend line for the company. So it is a good script for the investor as it
generates positive Cum. AB return throughout the event period.


No
SD-1 SD-1 SD ED-1 ED ED+10 ED+30
-
1
Cum. Ab 1924232.65 1550995.10 84529.35 6931979.40 30204.65 780642.80 499030.00
2
Days 30.00 10.00 1.00 154.00 1.00 10.00 30.00
Ave.Daily -
3
Ab (1/2) 64141.09 155099.51 84529.35 45012.85 30204.65 78064.28 16634.33
4
Ave.Vol. 54693.65
Ab/Ave
5
(3/4) 1.17 2.84 1.55 0.82 -0.55 1.43 0.30
Future Capital Holdings Ltd.

2.84
3.00
2.50
2.00
1.55
1.43
1.50 1.17
1.00 0.82
0.50 0.30
0.00
-0.50
-0.55
-1.00
ED+10 ED+30
AB.Volume 1.17 2.84 1.55 0.82 -0.55 1.43 0.30

Inte rpretation:
is big rise in AB volume turnover before source date and continues to remain positive
till effective date but then is falls substantially. In the long run smart investors exited
the scrip and thus the beginning and end abnormality are almost at similar levels.

Calculation of 5-day moving ave rage of high price for 21 days

Effective Date - 09/02/2009
Date Price
4 August 2009 280.40
5 August 2009 277.50
6 August 2009 273.70 271.67
7 August 2009 265.25 267.75
10 August 2009 261.50 265.56 267.612
11 August 2009 260.80 265.66 266.822
12 August 2009 266.55 267.42 267.052 267.211
13 August 2009 274.20 267.72 267.398 266.897
14 August 2009 274.05 268.9 267.172 266.597 266.486
17 August 2009 263.00 267.29 266.04 266.12 266.123
18 August 2009 266.70 264.53 265.324 265.604 265.923 266.20
19 August 2009 258.50 261.76 264.668 265.395 265.992
20 August 2009 260.40 264.14 264.814 265.9 266.455
21 August 2009 260.20 265.62 266.128 266.942
24 August 2009 274.90 268.02 268.566 268.432
25 August 2009 274.10 271.1 270.534
26 August 2009 270.50 273.95 272.12
27 August 2009 275.80 273.98
28 August 2009 274.45 273.55
31 August 2009 275.05
1 September 2009 271.95

Calculation of 5-Day moving average of high price for 21 days

Post-acquisition
Date Price
3 September 2009 266.25
4 September 2009 285.15
7 September 2009 285.15 280.24
8 September 2009 282.4 283.31
9 September 2009 282.25 281.52 280.832
10 September 2009 281.6 279.62 280.608
11 September 2009 276.2 279.47 279.578 279.778
14 September 2009 275.65 279.12 278.968 279.3344
15 September 2009 281.65 278.16 278.904 278.8436 278.934
16 September 2009 280.5 278.47 278.614 278.5036 278.539
17 September 2009 276.8 279.3 278.154 278.2112 278.147 278.16
18 September 2009 277.75 278.02 277.878 277.8 277.778
22 September 2009 279.8 276.82 277.506 277.3772 277.388
23 September 2009 275.25 276.78 276.848 277
24 September 2009 274.5 276.61 276.5 276.55
25 September 2009 276.6 276.01 276.268
29 September 2009 276.9 276.28 275.628
30 September 2009 276.8 275.66
1 October 2009 276.6 273.58
5 October 2009 271.4

Chart showing comparison of average Closing prices of pre and post-acquisition

of Future capital Holdings Ltd.
280
278 278.16
276
274
272
270
268
266 266.2
264
262
260
Pre Post
Inte rpretation:
merger average share price was 266.72 which has increased to 278.16 after
merger. It shows that the Shareholders‘ wealth has increased and the Company‘s
market value has also increased. Therefore we can say that the merger decision is
beneficiary to the company and it is a successful merger.

6. MOTILAL OSWAL F IN. SERVICES LTD.
Mean
Daily
SD-30 SD-10 SD+1 to ED+1 to ED+1 to AB.
Cum.AB
Return -33.76% 2.17% 1.22% -29.15% -1.93% -4.76% -13.58% -0.67%
Motilal Oswal Fin. Services Ltd.

5.00% 2.17% 1.22%
0.00%
-1.93%
-5.00%
-4.76%
%Cum.AB Return
-10.00%
-15.00% -13.58%
-20.00%
-25.00%
-30.00% -29.15%
-35.00% -33.76%
SD-30 SD-10 SD SD+1-E ED ED+1-E ED+1-E
TO TO SD-1 D-1 D+10 D+30
SD-01
AB.Return -33.76% 2.17% 1.22% -29.15% -1.93% -4.76% -13.58%
Time Period


0.00%
SD-30
-10.00%
-20.00%
-30.00% SD
% Cum.AB.Return
-40.00% SD-10
-50.00%
-60.00%
ED
ED+10
-70.00%
-80.00% ED+30
-90.00%
Days
Inte rpretation:
We can see that before the amalgamation was announced there was big positive Cum.
AB return. Between the source date and effective date it remains continuously
negative. In the long run the Cum. AB return tends to remain negative. The above
chart does not indicate perfect trend line for the company. So it is a poor script for the
investor as it generates negative Cum. AB return throughout the event period.


- - - - - -
1 Cum. Ab 698555.89 199837.21 59901.13 1075371.68 50330.13 432719.79 1038805.76
2 Days 30.00 10.00 1.00 40.00 1.00 10.00 30.00
Ave.Daily - -
3 Ab (1/2) -23285.20 19983.72 59901.13 -26884.29 50330.13 -43271.98 -34626.86
4 Ave.Vol. 89753.13
Ab/Ave
5 (3/4) -0.26 0.22 -0.67 -0.30 -0.56 -0.48 -0.39

0.30 0.22
0.20
0.10
0.00
-0.10
-0.20
-0.30 -0.26
-0.30
-0.40 -0.39
-0.50 -0.48
-0.60 -0.56
-0.70 -0.67
ED+10 ED+30
AB.Volume -0.26 0.22 -0.67 -0.30 -0.56 -0.48 -0.39

Inte rpretation:
is big rise in AB volume turnover before source date but then it falls substantially. As
we know that the abnormality in the turnover remains negative in every window
except one window. This shows that investors did not have the confidence in the scrip
so they remained away from trading it.


Effective date – 14/08/09
Date Price
16 July 2009 145.75
17 July 2009 148.50
20 July 2009 147.00 146.27
21 July 2009 146.05 146.15
22 July 2009 144.05 145.59 145.914
23 July 2009 145.15 145.73 145.786
24 July 2009 145.70 145.83 145.732 146.081
27 July 2009 147.70 145.63 146.138 146.424
28 July 2009 146.55 145.88 146.836 147.003 147.14
29 July 2009 143.05 147.62 147.626 147.763 147.667
30 July 2009 146.40 149.22 148.684 148.427 148.079 147.79
31 July 2009 154.40 149.78 149.532 148.718 148.189
3 August 2009 155.70 150.92 149.458 148.485 147.854
4 August 2009 149.35 150.12 148.292 147.552
5 August 2009 148.75 147.25 146.458 146.085
6 August 2009 142.40 143.39 144.022
7 August 2009 140.05 140.61 142.196
10 August 2009 136.40 138.74
11 August 2009 135.45 140.99
12 August 2009 139.40
13 August 2009 153.65

Calculation of 5-Day Moving Ave rage of Closing price for 21 days

Post-acquisition
Date Price
17 August 2009 143.20
18 August 2009 144.80
19 August 2009 141.45 144.05
20 August 2009 145.65 146.16
21 August 2009 145.15 147.24 147.932
24 August 2009 153.75 149.99 149.912
25 August 2009 150.20 152.22 151.622 151.273
26 August 2009 155.20 153.95 153.108 152.422
27 August 2009 156.80 154.71 153.79 153.101 152.753
28 August 2009 153.80 154.67 153.68 153.408 153.283
31 August 2009 157.55 153.4 153.306 153.563 153.773 153.96
1 September 2009 150.00 151.67 153.156 153.922 154.462
2 September 2009 148.85 152.08 153.882 154.871 155.545
3 September 2009 148.15 153.96 155.586 156.546
4 September 2009 155.85 158.3 158.424 158.826
7 September 2009 166.95 161.92 161.682
8 September 2009 171.70 165.86 164.554
9 September 2009 166.95 168.37
10 September 2009 167.85 168.32
11 September 2009 168.40
14 September 2009 166.70


Motilal Os wal Fin. Services Ltd.
155
154 153.96
153
152
151
150
149
148 147.79
147
146
145
144
Pre Post
Inte rpretation:
beneficiary to the company and it is a successful merger.

7. TEXMACO LTD.
Mean
Daily
SD-30 to SD-10 to SD+1 to ED+1 to ED+1 to AB.
SD-1 SD-1 SD ED-1 ED ED+10 ED+30 Return
Cum.AB
Return 7.43% -3.27% 1.25% -38.16% 0.47% -0.54% 6.64% -0.09%
Texmaco Ltd.
10.00% 7.43% 6.64%
5.00% 1.25% 0.47%
0.00%
-0.54%
% Cum.AB.Return
-5.00% -3.27%
-10.00%
-15.00%
-20.00%
-25.00%
-30.00%
-35.00%
-40.00% -38.16%
TO SD- TO D-1 D+10 D+30
01 SD-1
AB.Return 7.43% -3.27% 1.25% -38.16% 0.47% -0.54% 6.64%
Time Period

Texmaco Ltd.
30.00%
20.00%
SD-10
10.00%
SD
% Cum. AB. Return
0.00%
SD-30
-10.00%
-20.00% ED+30
-30.00% ED ED+10
-40.00%
Days
Inte rpretation:
We can see that before the amalgamation was announced there was big positive Cum.
AB return. The above chart does not indicate perfect trend line for the company. After
the source date it falls significantly but then it again gives positive returns. Till the
time of effective date it fluctuates significantly and remains negative. In the long run
the Cum. AB return tends to be negative. So it is an average script for the investor as
it generates average Cum. AB return throughout the event period.


- - - - - - -
1 Cum. Ab 25611.40 35256.40 2791.40 54620.40 1438.40 47079.80 90644.00
2 Days 30.00 10.00 1.00 243.00 1.00 10.00 30.00
Ave.Daily - -
3 Ab (1/2) -853.71 -3525.64 2791.40 -224.78 1438.40 -4707.98 -3021.47
4 Ave.Vol. 8227.40
Ab/Ave
5 (3/4) -0.10 -0.43 -0.34 -0.03 -0.17 -0.57 -0.37
Texmaco Ltd.
0.00
Ratio of Avg AB Vol to Avg Vol
-0.03
-0.10
-0.10
-0.20 -0.17
-0.30
-0.34
-0.40 -0.37
-0.43
-0.50
-0.60 -0.57
ED+10 ED+30
AB.Volume -0.10 -0.43 -0.34 -0.03 -0.17 -0.57 -0.37

Inte rpretation:
As we can see that there is a big amount of abnormality in volume on so urce date and
effective date. Such situation can be seen throughout after the amalgamation takes
place. But as we know that the abnormality in the turnover remains negative in every
window. As we can see that there is big fall in AB volume between source date and
effective date, this is indication that investors are waiting for amalgamation to happen
to make any further investment in the company.

Calculation of 5-day moving ave rage of Closing Price for 21 days

Pre-acquisition
Date Price
12 March 2008 1442.15
13 March 2008 1359.75
14 March 2008 1371.05 1351.02
17 March 2008 1284.35 1322.73
18 March 2008 1297.80 1303.1 1315.37
19 March 2008 1300.70 1295.83 1306.73
24 March 2008 1261.60 1304.19 1309.26 1319.52
25 March 2008 1334.70 1307.8 1323.34 1329.24
26 March 2008 1326.15 1335.36 1342.91 1345.4 1347.4
27 March 2008 1315.85 1373.52 1363.99 1363.69 1361.29
28 March 2008 1438.50 1393.66 1387.51 1379.16 1373.7 1369.39
31 March 2008 1452.40 1409.59 1400.72 1388.93 1381.52
1 April 2008 1435.40 1425.42 1400.7 1391.32 1383.06
2 April 2008 1405.80 1401.4 1391.76 1384.48
3 April 2008 1395.00 1373.45 1375.92 1371.38
4 April 2008 1318.40 1348.92 1353.31
7 April 2008 1312.65 1330.41 1335.21
8 April 2008 1312.75 1312.39
9 April 2008 1313.25 1310.86
10 April 2008 1304.90
11 April 2008 1310.75

Calculation of 5-Day Moving Ave rage of Closing price for 21 days

Post-acquisition
Date Price
15 April 2008 1340.00
16 April 2008 1331.00
17 April 2008 1346.00 1381.6
21 April 2008 1463.00 1398.4
22 April 2008 1428.00 1413.8 1407.88
23 April 2008 1424.00 1428.93 1413.56
24 April 2008 1408.00 1416.69 1414.94 1411.64
25 April 2008 1421.65 1409.97 1412.99 1411.54
28 April 2008 1401.80 1405.3 1408.82 1410.56 1411.17
29 April 2008 1394.40 1404.08 1407.37 1410.17 1412.23
30 April 2008 1400.65 1408.06 1408.7 1411.93 1415.02 1417.53
2 May 2008 1401.90 1409.45 1412.95 1416.97 1420.37
5 May 2008 1441.55 1416.6 1421.79 1425.49 1428.84
6 May 2008 1408.75 1426.56 1434.05 1437.28
7 May 2008 1430.15 1448.29 1449.94 1452.52
8 May 2008 1450.45 1469.37 1467.65
9 May 2008 1510.55 1488.86 1489.17
12 May 2008 1546.95 1505.18
13 May 2008 1506.20 1534.16
14 May 2008 1511.75
15 May 2008 1595.35

Chart showing comparison of average Closing prices Of Pre and Post-acquisition

of Texmaco ltd.
1430.00
1420.00 1417.53
1410.00
1400.00
1390.00
1380.00
1370.00 1369.39
1360.00
1350.00
1340.00
Pre Post
Inte rpretation:
merger average share price was 1369.39 which increased to 1417.53 after
merger. It shows that the Shareholders‘ wealth has increased and the Company‘s
market value has also increased. Therefore we can sa y that the merger decision is

8. KIRLOSKAR ELECTRICAL CO. LTD.
Mean
Daily
Cum.AB -
Return -5.06% -8.82% 14.95% 243.88% 5.15% -4.52% -11.97% 0.82%
Kirloskar Electrical Co. Ltd.

243.88%
250.00%
200.00%
%Cum.AB Return
150.00%
100.00%
50.00%
14.95%
0.00%
-5.06% -8.82% -5.15% -4.52% -11.97%
-50.00%
SD-30 SD-10 SD SD+1-ED ED ED+1- ED+1-ED
TO SD- TO SD-1 -1 ED+10 +30
01
AB.Return -5.06% -8.82% 14.95% 243.88% -5.15% -4.52% -11.97%
Time Period


500.00%
400.00%
% Cum. AB. Return
300.00%
ED
ED+10 ED+30
200.00%
100.00%
SD
0.00%
SD-30
SD-10
-100.00%
Days
Inte rpretation:
We can see that before the amalgamation was announced there was quite positive as
well as negative Cum. AB return. The above chart does not indicate perfect trend line
for the company. After the source date it falls significantly but then it take a big leap
to the positive returns. Till the time of effective date it fluctuates significantly but
remains positive. In the long run the Cum. AB return tends to be positive. So it is a
good script for the investor as it generates big positive Cum. AB return throughout the
event period.

SD-30 to SD-10 to ED+1 to ED+1 to

No SD-1 SD-1 SD SD+1 to ED-1 ED ED+10 ED+30
-
2513032.
1 Cum. Ab -1946430.56 -841765.93 -63976.12 -25913515.35 -122958.12 -786089.70 21
2 Days 30.00 10.00 1.00 323.00 1.00 10.00 30.00
Ave.Daily
3 Ab (1/2) -64881.02 -84176.59 -63976.12 -80227.60 -122958.12 -78608.97 -83767.74
134898.1
4 Ave.Vol. 2
Ab/Ave
5 (3/4) -0.48 -0.62 -0.47 -0.59 -0.91 -0.58 -0.62

0.00
-0.10
-0.20
-0.30
-0.40
-0.50 -0.48 -0.47
-0.60 -0.58
-0.59 -0.62
-0.62
-0.70
-0.80
-0.90
-0.91
-1.00
TO TO TO TO TO
SD-1 SD-1 ED-1 ED+10 ED+30
AB.Volume -0.48 -0.62 -0.47 -0.59 -0.91 -0.58 -0.62

Inte rpretation:
window except one window, this shows that investors did not have the confidence in
the scrip so they remained away from trading in it.


Date Price
14 September 2009 83.30
15 September 2009 82.75
16 September 2009 83.25 82.52
17 September 2009 81.50 82.63
18 September 2009 81.80 82.32 81.79
22 September 2009 83.85 81.31 81.278
23 September 2009 81.20 80.17 80.56 80.5032
24 September 2009 78.20 79.96 79.788 79.8552
25 September 2009 75.80 79.04 79.1 79.148 79.1349
29 September 2009 80.75 78.46 78.55 78.4352 78.4468
30 September 2009 79.25 77.87 77.742 77.7328 77.767 77.83
1 October 2009 78.30 77.42 76.996 77.0628 77.1508
5 October 2009 75.25 75.92 76.276 76.456 76.6549
6 October 2009 73.55 75.31 75.75 76.0672
7 October 2009 73.25 74.86 75.516 75.9556
8 October 2009 76.20 75.24 75.798
9 October 2009 76.05 76.25 76.438
12 October 2009 77.15 77.33
14 October 2009 78.60 78.51
15 October 2009 78.65
16 October 2009 82.10


Post-acquisition
Date Price
20 October 2008 86.95
21 October 2008 88.35
22 October 2008 89.20 86.26
23 October 2008 84.85 84.58
24 October 2008 81.95 83.8 84.132
27 October 2008 78.55 82.78 83.738
28 October 2008 84.45 83.24 84.028 84.36
29 October 2008 84.10 84.29 84.564 84.7264
31 October 2008 87.15 86.03 85.338 85.2372 85.1896
3 November 2008 87.20 86.48 85.964 85.6736 85.519
4 November 2008 87.25 86.65 86.292 85.9508 85.745 85.59
5 November 2008 86.70 86.37 86.21 86.0068 85.8048
6 November 2008 84.95 85.93 85.95 85.8564 85.6898
7 November 2008 85.75 85.62 85.618 85.5364
10 November 2008 85.00 85.18 85.212 85.0988
11 November 2008 85.70 84.99 84.692
12 November 2008 84.50 84.34 84.022
14 November 2008 84.00 83.33
17 November 2008 82.50 82.27
18 November 2008 79.95
19 November 2008 80.40


88
86 85.59
84
82
80
78 77.83
76
74
72
Pre Post
Inte rpretation:

9. KEC INTERNATINAL LTD.

Mean
Daily
Cum.AB - -
Return -12.76% 0.07% 1.26% -70.74% 4.40% -7.13% 31.19% -0.11%
KEC International Ltd.

40.00% 31.19%
20.00%
0.07%
%Cum.AB Return
0.00%
-1.26% -4.40% -7.13%
-20.00% -12.76%
-40.00%
-60.00%
-70.74%
-80.00%
SD-30 SD-10 SD SD+1- ED ED+1-E ED+1-E
TO SD- TO SD- ED-1 D+10 D+30
01 1
AB.Return -12.76% 0.07% -1.26% -70.74% -4.40% -7.13% 31.19%
Time Period


60.00%
40.00%
20.00%
0.00% SD-30
% Cum.AB.Return
-20.00% SD
SD-10
-40.00%
ED+30
-60.00%
-80.00%
ED ED+10
-100.00%
-120.00%
Days
Inte rpretation:
Cum. AB return. But it rises substantially between source date and effective date. The
above chart does not indicate perfect trend line for the company. But in the long run
the Cum. AB return tends to remain negative. We can see the line of return going
downwards as the effective date arrives but after that it again move towards positivity.
So, it is poor script for the investor as overall it generates negative Cum. AB return
throughout the event period.


- 3551379.1 -
1 Cum. Ab 88449.82 86783.64 13684.05 3 13147.05 154344.64 655099.92
2 Days 30.00 10.00 1.00 543.00 1.00 10.00 30.00
Ave.Daily - -
3 Ab (1/2) 2948.33 8678.36 13684.05 6540.29 13147.05 15434.46 21836.66
4 Ave.Vol. 15859.05
Ab/Ave
5 (3/4) 0.19 0.55 -0.86 0.41 -0.83 0.97 1.38

1.50 1.38
0.97
1.00
0.55
0.41
0.50
0.19
0.00
-0.50
-1.00 -0.86 -0.83

TO AD- TO AD- TO ED- TO TO
1 1 1 ED+10 ED+30
AB.Volume 0.19 0.55 -0.86 0.41 -0.83 0.97 1.38
Inte rpretation:
window except one window, this shows that investors did not have the confidence in
the scrip so they remained away from trading in it.


Date Price
14 January 2008 878
15 January 2008 852
16 January 2008 821 827.2
17 January 2008 817 797.2
18 January 2008 768 755.6 760.8
21 January 2008 728 726.2 733.12
22 January 2008 644 697.8 711.12 721.024
23 January 2008 674 688.8 701.24 709.744
24 January 2008 675 687.2 698.84 705.296 710.76
25 January 2008 723 706.2 704.4 706.784 709.765
28 January 2008 720 714.2 710.88 710.952 711.784 713.21
29 January 2008 739 725.6 718.56 716.048 715.2
30 January 2008 714 721.2 722.08 719.84 718.546
31 January 2008 732 725.6 724.32 722.376
1 February 2008 701 723.8 723.36 723.512
4 February 2008 742 725.4 723.56
5 February 2008 730 720.8 724.24
6 February 2008 722 722.2
7 February 2008 709 729
8 February 2008 708


Post-acquisition
Date Price
14 February 2008 692 699.8
15 February 2008 701 712.4
18 February 2008 729 718.8 716.68
19 February 2008 748 724.6 721.48
20 February 2008 724 727.8 722.92 721.664
21 February 2008 721 723.8 723.72 722.952
22 February 2008 717 719.6 723.52 723.208 722.539
25 February 2008 709 722.8 723.12 722.976 722.158
26 February 2008 727 723.6 722.76 721.896 720.931 720.21
27 February 2008 740 725.8 721.76 719.76 718.986
28 February 2008 725 722 718.32 716.816 716.437
29 February 2008 728 714.6 712.84 713.48
3 March 2008 690 705.6 708.4 710.232
4 March 2008 690 696.2 706.08
5 March 2008 695 703.6 705.52
7 March 2008 678 710.4
10 March 2008 765 711.8
11 March 2008 724
12 March 2008 697


722
720 720.21
718
716
714
713.21
712
710
708
Pre post
Inte rpretation:
value has also increased. Therefore we can say that the merger beneficiary to the
Company and it is a successful merger.

10. BODAL CHEMICALS LTD.

Mean
Daily
Cum.AB -
Return 9.60% 2.42% 2.37% 97.21% 3.57% 2.18% 11.20% 0.50%
Bodal Chemical Ltd.

97.21%
100.00%
80.00%
%Cum.AB Return
60.00%
40.00%
20.00% 9.60% 11.20%

2.42% 2.37% 2.18%
0.00%
-3.57%
-20.00%
TO SD- TO SD-1 ED-1 ED+10 D+30
01
AB.Return 9.60% 2.42% 2.37% 97.21% -3.57% 2.18% 11.20%
Time Period

Bodal Chemical Ltd.

140.00%
120.00%
ED+30
ED+10
100.00% ED
% Cum. AB. Return
80.00%
60.00%
40.00%
20.00%
SD-10 SD
0.00% SD-30
Days
Inte rpretation:
the Cum. AB return tends to remain very positive. We can see the line of return going
upwards as the effective date arrives but after that also it is going higher. From almost
20% at the source date it has reached to 120%. So, it is very good script for the
investor as overall it generates big positive Cum. AB return throughout the event
period.


-
1 CUM. AB 20912.80 16187.30 2331.10 1508171.60 14607.90 11070.20 44063.70
2 DAYS 30.00 10.00 1.00 208.00 1.00 10.00 30.00
AVE.DAILY -
3 AB (1/2) 697.09 1618.73 2331.10 7250.82 14607.90 1107.02 1468.79
4 AVE.VOL. 3816.10
AB/AVE
5 (3/4) 0.18 0.42 -0.61 1.90 3.83 0.29 0.38
Bodal Chemicals Ltd.

3.83
4.00
3.50
3.00
2.50
1.90
2.00
1.50
1.00
0.42 0.29 0.38
0.50 0.18
0.00
-0.50
-0.61
-1.00
TO TO TO TO TO
SD-1 SD-1 ED-1 ED+10 ED+30
AB.Volume 0.18 0.42 -0.61 1.90 3.83 0.29 0.38

Inte rpretation:
is big rise in AB volume turnover between source date and effective date and
continues to remain positive. After effective date it falls substantially. In the long run
smart investors exited the scrip and thus the beginning and end abnormality are
almost at similar levels.


Date Price
1 August 2008 58
4 August 2008 59
5 August 2008 60 59.2
6 August 2008 60 59.2
7 August 2008 59 58.8 58.6
8 August 2008 58 58.2 58.16
11 August 2008 57 57.6 57.68 57.704
12 August 2008 57 57 57.24 57.288
13 August 2008 57 56.8 56.84 56.912 56.9648
14 August 2008 56 56.6 56.52 56.592 56.6528
18 August 2008 57 56.2 56.28 56.328 56.4032 56.47
19 August 2008 56 56 56.08 56.144 56.224
20 August 2008 55 55.8 55.92 56.04 56.1184
21 August 2008 56 55.8 55.92 56.016
22 August 2008 55 55.8 56 56.064
25 August 2008 57 56.2 56.16
26 August 2008 56 56.4 56.32
27 August 2008 57 56.6
28 August 2008 57 56.6
29 August 2008 56
1 September 2008 57


Post-acquisition
Date Price
2 September 2008 57
4 September 2008 58
5 September 2008 58 58.6
8 September 2008 60 59.2
9 September 2008 60 59.4 59
10 September 2008 60 59.4 58.72
11 September 2008 59 58.4 58 57.688
12 September 2008 58 57.2 56.96 56.848
15 September 2008 55 55.6 55.76 55.92 56.0192
16 September 2008 54 54.2 54.8 55.096 55.3488
17 September 2008 52 53.4 54.08 54.544 54.8544 55.07
18 September 2008 52 53.6 53.88 54.336 54.5888
19 September 2008 54 53.6 54.2 54.376 54.528
22 September 2008 56 54.6 54.72 54.592
23 September 2008 54 55.8 55 54.792
24 September 2008 57 56 55.16
25 September 2008 58 55 54.88
26 September 2008 55 54.4
29 September 2008 51 53.2
30 September 2008 51
1 October 2008 51


Bodal Chemicals Ltd.
57
56.5 56.47
56
55.5
55 55.07
54.5
54
Pre Post
Inte rpretation:
beneficial to the company.

11. GRAUER & WEIL (INDIA) LTD.
Mean
Daily
Cum.AB
Return 9.95% 5.35% 0.47% 97.16% 0.29% 2.35% 6.65% 0.29%
Grauer & Weil (India) Ltd.

97.16%
100.00%
90.00%
80.00%
70.00%
%Cum.AB Return
60.00%
50.00%
40.00%
30.00%
20.00% 9.95%
5.35% 6.65%
10.00% 0.47% 0.29% 2.35%
0.00%
TO SD- TO SD- ED-1 ED+10 ED+30
01 1
AB.Return 9.95% 5.35% 0.47% 97.16% 0.29% 2.35% 6.65%
Time Period


140.00%
120.00% ED+30
ED+10
ED
100.00%
% Cum. AB. Return
80.00%
60.00%
40.00%
20.00%
SD
0.00% SD-10
SD-30
-20.00%
Days
Inte rpretation:
the Cum. AB return tends to remain very positive and stagnant. We can see the line of
return going upwards as the effective date arrives but after that also it is becoming
stagnant. So, it is very good script for the investor as overall it generates big positive


- - - - -
1 CUM. AB 34353.23 75322.56 16549.09 1558674.05 7368.09 89569.74 -4631.14
2 DAYS 30.00 10.00 1.00 488.00 1.00 10.00 30.00
AVE.DAILY - -
3 AB (1/2) 1145.11 -7532.26 16549.09 -3194.00 7368.09 -8956.97 -154.37
4 AVE.VOL. 17509.09
AB/AVE
5 (3/4) 0.07 -0.43 -0.95 -0.18 -0.42 -0.51 -0.01

0.20 0.07
0.00
-0.01
-0.20 -0.18
-0.40
-0.43 -0.42
-0.60 -0.51
-0.80
-0.95
-1.00
TO TO SD- TO TO TO
SD-1 1 ED-1 ED+10 ED+30
AB.Volume 0.07 -0.43 -0.95 -0.18 -0.42 -0.51 -0.01
Inte rpretation:
is big fall in AB volume turnover between source date and effective date and
continues to remain negative. In the long run smart investors exited the scrip and thus
the beginning and end abnormality are almost at similar levels.


Date Price
4 September 2009 61
7 September 2009 62
8 September 2009 65 62.8
9 September 2009 64 63
10 September 2009 62 62.8 62.56
11 September 2009 62 62.2 62.36
14 September 2009 61 62 62.36 62.688
15 September 2009 62 61.8 62.72 63.048
16 September 2009 63 63 63.44 63.688 63.8576
17 September 2009 61 64.6 64.36 64.512 64.5328
18 September 2009 68 65.8 65.56 65.352 65.2288 65.12
22 September 2009 69 66.6 66.48 66.064 65.8096
23 September 2009 68 67.8 66.92 66.528 66.1632
24 September 2009 67 67.6 67 66.592
25 September 2009 67 66.8 66.68 66.28
29 September 2009 67 66.2 65.88
30 September 2009 65 65 64.92
1 October 2009 65 63.8
5 October 2009 61 62.8
6 October 2009 61
7 October 2009 62


Post-acquisition
Date Price
9 October 2009 61
12 October 2009 61
14 October 2009 67 64.2
15 October 2009 65 65
16 October 2009 67 65.6 64.72
17 October 2009 65 64.8 64.48
20 October 2009 64 64 63.92 63.648
21 October 2009 63 63 63.04 62.928
22 October 2009 61 62.2 62.08 62.056 61.9568
23 October 2009 62 61.2 61.12 61.08 61.0448
26 October 2009 61 60 60.12 60.072 60.088 60.10
27 October 2009 59 59.2 59.04 59.088 59.1376
28 October 2009 57 58 58 58.144 58.2512
29 October 2009 57 56.8 57.16 57.304
30 October 2009 56 56 56.4 56.648
3 November 2009 55 55.8 55.92
4 November 2009 55 55.4 55.76
5 November 2009 56 55.6
6 November 2009 55 56
9 November 2009 57
10 November 2009 57


Graue r &Weil (India) Ltd.
66
65 65.12
64
63
62
61
60 60.1
59
58
57
Pre Post
Inte rpretation:

12. GULSHAN POLYOLS LTD.
Mean
Daily
Cum.AB - -
Return -96.85% -31.89% 8.79% -270.79% 6.00% -17.42% -11.65% -2.17%
Gulshan Polyols Ltd.
0.00%
-8.79% -6.00%
-17.42% -11.65%
-50.00% -31.89%
%Cum.AB Return
-100.00% -96.85%
-150.00%
-200.00%
-250.00%
-270.79%
-300.00%
TO SD- TO SD- D-1 D+10 D+30
01 1
AB.Return -96.85% -31.89% -8.79% -270.79 -6.00% -17.42% -11.65%
Time Period


50.00%
0.00% SD-30
-50.00%
SD-10
% Cum. AB. Return
-100.00%
SD
-150.00%
-200.00%
-250.00%
-300.00%
-350.00%
ED+30
-400.00% ED
ED+10
-450.00%
Days
Inte rpretation:
We can see that before the amalgamation was announced there was low positive Cum.
AB return. The above chart does not indicate perfect trend line for the company.
Between the source date and effective date it remains continuously negative. In the
long run the Cum. AB return tends to remain negative. So it is a poor script for the
investor as it generates negative Cum. AB return throughout the event period.


- - - - - - -
1 Cum. Ab 25711.07 75507.39 8123.05 778000.78 13482.05 79716.29 262718.02
2 Days 30.00 10.00 1.00 147.00 1.00 10.00 30.00
Ave.Daily - -
3 Ab (1/2) -857.04 -7550.74 8123.05 -5292.52 13482.05 -7971.63 -8757.27
4 Ave.Vol. 14123.05
Ab/Ave
5 (3/4) -0.06 -0.53 -0.58 -0.37 -0.95 -0.56 -0.62

0.00
-0.10 -0.06
-0.20
-0.30
-0.40 -0.37
-0.50
-0.60 -0.53 -0.56
-0.58
-0.70 -0.62
-0.80
-0.90
-1.00 -0.95
TO SD-1 TO SD-1 TO TO TO
ED-1 ED+10 ED+30
AB.Volume -0.06 -0.53 -0.58 -0.37 -0.95 -0.56 -0.62

Inte rpretation:
window this shows that investors did not have the confidence in the scrip so they
remained away from trading in it.


Date Price
7 October 2008 149
8 October 2008 156
10 October 2008 148 147.2
13 October 2008 140 144.4
14 October 2008 143 139 138.68
15 October 2008 135 133.8 133.72
16 October 2008 129 129 128.24 128.208
17 October 2008 122 122.4 122.84 122.976
20 October 2008 116 117 117.56 117.872 118.235
21 October 2008 110 112 112.52 113.144 113.714
22 October 2008 108 107.4 108.2 108.976 109.76 110.50
23 October 2008 104 103.8 104.6 105.6 106.562
24 October 2008 99 100.8 102 103.208 104.25
27 October 2008 98 99 100.68 101.88
28 October 2008 95 99 100.56 101.584
29 October 2008 99 100.8 101.56
31 October 2008 104 103.2 103.12
3 November 2008 108 105.8
4 November 2008 110 106.8
5 November 2008 108
6 November 2008 104


Post-acquisition
Date Price
7 November 2008 107
10 November 2008 106
11 November 2008 107 103.8
14 November 2008 102 100.8
17 November 2008 97 97 96.28
18 November 2008 92 92.2 92.16
19 November 2008 87 87.6 87.8 87.768
21 November 2008 83 83.2 83.4 83.576
24 November 2008 79 79 79.2 79.496 79.7296
25 November 2008 75 75 75.32 75.648 76.0016
26 November 2008 71 71.2 71.76 72.16 72.6032 73.01
28 November 2008 67 68.2 68.56 69.128 69.6176
1 December 2008 64 65.4 65.96 66.584 67.1072
2 December 2008 64 63 64.04 64.568
3 December 2008 61 62 62.6 63.096
4 December 2008 59 61.6 61.68
5 December 2008 62 61 61.2
8 December 2008 62 60.8
10 December 2008 61 60.6
11 December 2008 60
12 December 2008 58


120
110.5
100
80
73.01
60
40
20
0
Pre post
Inte rpretation:
shows that the Shareholders‘ wealth has decreased and the Company‘s market

13. MIRC ELECTRONICS LTD.
Mean
Daily
Cum. AB
Return -8.29% -5.44% 0.02% 15.53% -1.42% -4.85% -12.61% -0.03%
MIRC Electronics Ltd

20.00%
15.53%
15.00%
10.00%
%Cum.AB Return
5.00%
0.02%
0.00%
-1.42%
-5.00%
-5.44% -4.85%
-10.00% -8.29%
-12.61%
-15.00%
TO SD- TO SD-1 ED-1 D+10 D+30
01
AB.Return -8.29% -5.44% 0.02% 15.53% -1.42% -4.85% -12.61%
Time Period

MIRC Electronics Ltd.

30.00%
20.00%
10.00%
% Cum. AB. Return
ED
SD-30
0.00% ED+10
SD-10
SD ED+30
-10.00%
-20.00%
-30.00%
-40.00%
Days
Inte rpretation:
the Cum. AB return tends to remain negative. So, it is a poor script for the investor as
overall it generates negative Cum. AB return throughout the event period.


- - -
1 Cum. Ab 644059.52 115436.19 31816.02 1068705.19 38313.98 2084057.83 1978184.48
2 Days 30.00 10.00 1.00 250.00 1.00 10.00 30.00
Ave.Daily -
3 Ab (1/2) -21468.65 -11543.62 31816.02 4274.82 38313.98 208405.78 65939.48
4 Ave.Vol. 89699.02
Ab/Ave
5 (3/4) -0.24 -0.13 -0.35 0.05 0.43 2.32 0.74

2.50 2.32
2.00
1.50
1.00 0.74
0.43
0.50
0.05
0.00
-0.13
-0.24 -0.35
-0.50
TO TO TO TO TO
SD-1 SD-1 ED-1 ED+10 ED+30
AB.Volume -0.24 -0.13 -0.35 0.05 0.43 2.32 0.74
Inte rpretation:
window till the source date and effective date. After the effective date abnormal

volume goes higher as the investors notice the positive return in it. So more trading
takes place after the effective date and abnormal volume increases.


Date Price
27 April 2009 15
28 April 2009 14
29 April 2009 13 13.6
4 May 2009 13 13.2
5 May 2009 13 13 13.16
6 May 2009 13 13 13.04
7 May 2009 13 13 13 13.04
8 May 2009 13 13 13 13.008
11 May 2009 13 13 13 13.008 13.0336
12 May 2009 13 13 13 13.032 13.0592
13 May 2009 13 13 13.04 13.08 13.12 13.16
14 May 2009 13 13 13.12 13.168 13.2192
15 May 2009 13 13.2 13.24 13.312 13.3616
18 May 2009 13 13.4 13.44 13.504
19 May 2009 14 13.6 13.72 13.744
20 May 2009 14 14 14
21 May 2009 14 14.4 14.32
22 May 2009 15 14.6
25 May 2009 15 15
26 May 2009 15
27 May 2009 16

Calculation of 5-Day moving average of Closing price for 21 days

Post-acquisition
Date Price
28 May 2009 15
29 May 2009 17
1 June 2009 17 16.2
2 June 2009 16 16.4
3 June 2009 16 16.2 16.08
4 June 2009 16 15.8 15.96
5 June 2009 16 15.8 15.76 15.728
8 June 2009 15 15.6 15.52 15.52
9 June 2009 16 15.4 15.32 15.28 15.2656
10 June 2009 15 15 15.04 15.024 15.0272
11 June 2009 15 14.8 14.76 14.776 14.7904 14.81
12 June 2009 14 14.4 14.48 14.536 14.5712
15 June 2009 14 14.2 14.28 14.336 14.384
16 June 2009 14 14 14.12 14.184
17 June 2009 14 14 14.04 14.088
18 June 2009 14 14 14
19 June 2009 14 14 14
22 June 2009 14 14
23 June 2009 14 14
24 June 2009 14
25 June 2009 14


15
14.81
14.5
14
13.5
13.16
13
12.5
12
Pre Post
Inte rpretation:
shows that the Shareholders‘ wealth has increased and the Company‘s Market
value has also increased. Therefore we can say that the merger is beneficial to
the Company and it is a successful merger.

14. SIEMENS LTD.

Mean
Daily
Cum. AB -
Return 10.84% -4.46% 1.97% -52.69% 4.16% 4.84% 14.72% -0.09%
Siemens Ltd.
20.00% 14.72%
10.84%
10.00% 4.16% 4.84%
0.00%
%Cum.AB Return
-1.97%
-4.46%
-10.00%
-20.00%
-30.00%
-40.00%
-50.00%
-52.69%
-60.00%
SD-30 SD-10 SD SD+1-E ED ED+1- ED+1-
TO SD- TO D-1 ED+10 ED+30
01 SD-1
AB.Return 10.84% -4.46% -1.97% -52.69% 4.16% 4.84% 14.72%
Time Period

Siemens Ltd.
30.00%
20.00%
SD-10
10.00% SD
0.00%
SD-30
% Cum. AB. Return
-10.00%
-20.00%
-30.00% ED+30
ED+10
-40.00% ED
-50.00%
-60.00%
-70.00%
Days
Inte rpretation:
Cum. AB return. But it falls substantially between source date and effective date. The
the Cum. AB return tends to remain positive. We can see the line of return going
upwards as the effective date arrives but after that also it is becoming stagnant. So, it
is good script for the investor as overall it generates big positive Cum. AB return


No SD-1 SD-1SD EDED-1 ED+30 ED+10
-
- - - - - - 1777174.
1 Cum. Ab 2217087.10 781861.07 106299.44 22175932.83 137093.44 876353.07 34
2 Days 30.00 10.00 1.00 260.00 1.00 10.00 30.00
Ave.Daily - - -
3 Ab (1/2) -73902.90 -78186.11 106299.44 -85292.05 137093.44 -87635.31 59239.14
140697.4
4 Ave.Vol. 4
Ab/Ave
5 (3/4) -0.53 -0.56 -0.76 -0.61 -0.97 -0.62 -0.42
Siemens Ltd.
0.00
-0.10
-0.20
-0.30
-0.40
-0.42
-0.50
-0.53
-0.60 -0.56
-0.61 -0.62
-0.70
-0.80 -0.76
-0.90
-1.00 -0.97
ED+10 ED+30
AB.Volume -0.53 -0.56 -0.76 -0.61 -0.97 -0.62 -0.42

Inte rpretation:
window. After the effective date also abnormal volume goes negative so that means
investors did not have confidence in the script and they stayed away from trading it.


Date Price
19 September 2008 506 489.2
22 September 2008 489 490.2
23 September 2008 481 483.2 476.48
24 September 2008 484 467.4 465.8
25 September 2008 456 452.4 451.56 457.54
26 September 2008 427 435.8 436.32 440.78
29 September 2008 414 419 FALSE 423.54 423.616
30 September 2008 398 407 409.44 406.5 408.62
1 October 2008 400 398.4 396.84 389.72 394.1488 394.74
3 October 2008 396 387 383.4 382.56 380.2616
6 October 2008 384 372.8 369.2 368.424 367.0416
7 October 2008 357 351.8 353.92 354.104
8 October 2008 327 336 338.76 340.4
10 October 2008 295 322 325.24
13 October 2008 317 311.2 314.88
14 October 2008 314 305.2
15 October 2008 303 300
16 October 2008 297
17 October 2008 269


Post-acquisition
Date Price
20 October 2008 282
21 October 2008 306
22 October 2008 293 285.6
23 October 2008 282 280.2
24 October 2008 265 275.2 274.64
27 October 2008 255 268.2 271.12
28 October 2008 281 264 271.24 274
29 October 2008 258 268 273.72 276.48
31 October 2008 261 280.8 279.28 281.352 282.538
3 November 2008 285 287.6 287.04 287.312 287.547
4 November 2008 319 296 295.48 293.544 292.853 292.25
5 November 2008 315 302.8 301.04 299.048 297.498
6 November 2008 300 310.2 304.88 303.008 300.834
7 November 2008 295 308.6 306.8 304.576
10 November 2008 322 306.8 306.84 303.992
11 November 2008 311 305.6 303.32
12 November 2008 306 303 298.12
14 November 2008 294 292.6
17 November 2008 282 282.6


Siemens Ltd.
450
400 394.74
350
300 292.75
250
200
150
100
50
0
Pre Post
Inte rpretation:
merger average share price was 394.74. which decreased to 292.75 after merger.
It shows that the Shareholders‘ wealth has decreased and the Company‘s Market

15. VOLTAS LTD.

Mean
Daily
Cum. AB
Return -0.07% 2.40% 2.14% -5.09% 3.55% -1.21% -10.70% -0.03%
Voltas Ltd.
3.55%
4.00% 2.40% 2.14%
2.00%
0.00%
%Cum.AB Return
-0.07%
-2.00% -1.21%
-4.00%
-6.00% -5.09%
-8.00%
-10.00%
-10.70%
-12.00%
TO TO SD- D-1 D+10 D+30
SD-01 1
AB.Return -0.07% 2.40% 2.14% -5.09% 3.55% -1.21% -10.70%
Time Period

Voltas Ltd.
20.00%
SD ED
0.00% ED+10
SD-30
SD-10
ED+30
% Cum. AB. Return
-20.00%
-40.00%
-60.00%
-80.00%
-100.00%
Days
Inte rpretation:
is a poor script for the investor as overall it generates big positive Cum. AB return

ED+1
SD-30 to SD-10 to SD+1 to ED+1 to to
- - 446215
1 Cum. Ab 766122.51 1082746.86 75603.02 66055720.44 424175.02 1590552.19 .51
2 Days 30.00 10.00 1.00 354.00 1.00 10.00 30.00
Ave.Daily 14873.
3 Ab (1/2) -25537.42 -108274.69 75603.02 186598.08 424175.02 159055.22 85
438521
4 Ave.Vol. .98
Ab/Ave
5 (3/4) -0.06 -0.25 0.17 0.43 0.97 0.36 0.03
Voltas Ltd.
0.97
1.00
0.80
0.60
0.43
0.36
0.40
0.17
0.20
0.03
0.00
-0.06
-0.20
-0.25
-0.40
TO SD- TO TO ED- TO TO
1 SD-1 1 ED+10 ED+30
AB.Volume -0.06 -0.25 0.17 0.43 0.97 0.36 0.03

Inte rpretation:
place. But as we know that the abnormality in the turnover remains negative till the
source date. Thus investors started trading in it more and it abnormal volume is
increasing on the effective date. So, more trading takes place between the source date
and effective date in order to earn short-term profit.

Calculation of 5-day moving ave rage of Closing Price for 21 days

Pre-acquisition - Closing Price
Date Price
27 July 2009 140.70
28 July 2009 140.80
29 July 2009 140.50 140.66
30 July 2009 137.15 141.31
31 July 2009 144.15 141.16 141.708
3 August 2009 143.95 142.14 141.938
4 August 2009 140.05 143.27 141.516 141.189
5 August 2009 145.40 141.81 140.99 140.489
6 August 2009 142.80 139.2 139.792 139.534 139.531
7 August 2009 136.85 138.53 138.21 138.616 138.781
10 August 2009 130.90 136.15 137.162 137.827 138.2 138.48
11 August 2009 136.70 135.36 136.926 137.437 137.916
12 August 2009 133.50 136.57 137.044 137.584 137.963
13 August 2009 138.85 138.02 137.844 138.113
14 August 2009 142.90 139.12 138.946 138.854
17 August 2009 138.15 140.15 139.806
18 August 2009 142.20 140.87 140.632
19 August 2009 138.65 140.87
20 August 2009 142.45 142.15
21 August 2009 142.90
24 August 2009 144.55


Post-acquisition
Date Price
25 August 2009 150.40
26 August 2009 152.85
27 August 2009 151.60 154.68
28 August 2009 160.55 154.83
31 August 2009 158.00 153.8 153.348
1 September 2009 151.15 152.69 152.372
2 September 2009 147.70 150.74 151.65 152.042
3 September 2009 146.05 149.8 151.364 151.738
4 September 2009 150.80 151.22 151.478 151.68 151.77
7 September 2009 153.30 152.37 151.824 151.711 151.654
8 September 2009 158.25 153.26 152.084 151.678 151.527 151.47
9 September 2009 153.45 152.47 151.804 151.466 151.328
10 September 2009 150.50 151.1 151.198 151.099 151.058
11 September 2009 146.85 149.82 150.42 150.688
14 September 2009 146.45 149.34 149.99 150.36
15 September 2009 151.85 149.37 150.03
16 September 2009 151.05 150.32 150.16
17 September 2009 150.65 151.3
18 September 2009 151.60 150.47
22 September 2009 151.35
23 September 2009 147.70

Chart showing comparison of average Closing prices Of Pre and Post-acquisition

of Voltas ltd.
155.00
151.47
150.00
145.00
140.00
138.48
135.00
130.00
Pre Post
Inte rpretation:
merger. It shows that the Shareholders‘ wealth has increased and the
Company‘s market value has also increased. Therefore we can say that the merger
decision is beneficiary to the Company and it is a successful merger.

16. HCL INFOSYSTEMS LTD

Mean
Daily
Cum. AB
Return -12.55% 7.35% -6.80% -24.76% -3.06% -5.78% -11.25% -0.42%
HCL Infosystems Ltd.
10.00% 7.35%
5.00%
%Cum.AB Return
0.00%
-5.00% -3.06%
-6.80% -5.78%
-10.00%
-11.25%
-12.55%
-15.00%
-20.00%
-25.00% -24.76%
TO SD- TO SD-1 D-1 D+10 D+30
01
AB.Return -12.55% 7.35% -6.80% -24.76% -3.06% -5.78% -11.25%
Time Period


0.00%
SD-30
-10.00%
SD
-20.00%
% Cum. AB. Return
SD-10
-30.00%
-40.00%
ED
-50.00%
ED+10
ED+30
-60.00%
-70.00%
Days
Inte rpretation:
the Cum. AB return tends to remain very negative. We can see the line of return going
downwards as the effective date arrives. So, it is poor script for the investor as overall
it generates big negative Cum. AB return throughout the event period.


-
1 Cum. Ab 433765.85 471067.75 9390.85 1746231.10 1003172.15 329222.90 925609.15
2 Days 30.00 10.00 1.00 106.00 1.00 10.00 30.00
Ave.Daily -
3 Ab (1/2) 14458.86 47106.78 9390.85 16473.88 1003172.15 32922.29 30853.64
4 Ave.Vol. 21135.85
Ab/Ave
5 (3/4) 0.68 2.23 -0.44 0.78 47.46 1.56 1.46

47.46
50.00
45.00
40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00 0.68 2.23 0.78 1.56 1.46
0.00
-0.44
-5.00
1 1 1 ED+10 ED+30
AB.Volume 0.68 2.23 -0.44 0.78 47.46 1.56 1.46

Inte rpretation:
place. But as we know that the abnormality in the turnover remains lower till the
effective date. Thus investors started trading in it more on effective date and it
abnormal volume is increasing on the effective date. It can be said that due to more
intra-day trading abnormal volume goes higher on effective date.


Date Price
28 April 2009 93.40
29 April 2009 93.70
4 May 2009 94.75 94.08
5 May 2009 95.15 94.08
6 May 2009 93.40 93.77 93.566
7 May 2009 93.40 93.12 93.45
8 May 2009 92.15 92.78 93.432 93.7296
11 May 2009 91.50 93.5 93.7 94.2092
12 May 2009 93.45 93.99 94.5 95.0696 95.56512
13 May 2009 97.00 95.11 95.964 96.4452 96.98752
14 May 2009 95.85 97.12 97.752 98.372 98.87736 99.30
15 May 2009 97.75 100.1 100.31 100.8416 101.2126
18 May 2009 101.55 102.44 103.334 103.6584 103.8787
19 May 2009 108.35 106.78 106.848 106.746
20 May 2009 108.70 110.23 110.048 109.7756
21 May 2009 117.55 114.69 113.19
22 May 2009 115.00 116.1 115.458
25 May 2009 123.85 118.15
26 May 2009 115.40 118.12
27 May 2009 118.95
28 May 2009 117.40


Post-acquisition
Date Price
1 June 2009 115.80
2 June 2009 120.40
3 June 2009 120.15 118.63
4 June 2009 118.75 118.28
5 June 2009 118.05 118.09 118.136
8 June 2009 114.05 117.88 117.968
9 June 2009 119.45 117.8 118.038 118.017
10 June 2009 119.10 117.79 118.004 117.942
11 June 2009 118.35 118.63 117.94 117.874 117.816
12 June 2009 118.00 117.92 117.762 117.733 117.66
15 June 2009 118.25 117.56 117.626 117.515 117.459 117.40
16 June 2009 115.90 116.91 117.334 117.235 117.199
17 June 2009 117.30 117.11 116.912 116.937 116.887
18 June 2009 115.10 117.17 116.542 116.575
19 June 2009 119.00 115.81 116.27 116.173
22 June 2009 118.55 115.71 115.818
23 June 2009 109.10 115.55 115.322
24 June 2009 116.80 114.85
25 June 2009 114.30 114.69
26 June 2009 115.50
29 June 2009 117.75


120
117.4
115
110
105
100
99.3
95
90
Pre Post
Inte rpretation:
shows that the Shareholders‘ wealth has increased and the Company‘s market

17. MINDTREE LTD.

Mean
SD+1 ED+1 ED+1 Daily
SD-30 to SD-10 to ED- to to AB.
SD-1 to SD-1 SD 1 ED ED+10 ED+30 Return
Cum.AB
Return 4.77% -1.96% 3.88% 102.47% 4.89% 2.12% 6.69% 0.47%
Mindtree Ltd.
120.00%
102.47%
100.00%
%Cum.AB Return
80.00%
60.00%
40.00%
20.00% 6.69%
4.77% 3.88% 4.89% 2.12%
0.00%
-1.96%
-20.00%
01 1
AB.Return 4.77% -1.96% 3.88% 102.47% 4.89% 2.12% 6.69%
Time Period

Mindtree Ltd.
160.00%
140.00%
120.00% ED+30
ED ED+10
% Cum. AB. Return
100.00%
80.00%
60.00%
40.00%
20.00%
SD-10 SD
0.00%
SD-30
-20.00%
Days
Inte rpretation:
the Cum. AB return tends to remain very positive and stagnant. We can see the line of
return going upwards as the effective date arrives but after that also it is becoming
stagnant. So, it is very good script for the investor as overall it generates big positive


-
1 Cum. Ab 131325.70 79838.79 17079.53 14811234.00 138174.53 427376.28 2604438.77
2 Days 30.00 10.00 1.00 267.00 1.00 10.00 30.00
Ave.Daily
3 Ab (1/2) 4377.52 -7983.88 17079.53 55472.79 138174.53 42737.63 86814.63
4 Ave.Vol. 19747.47
Ab/Ave
5 (3/4) 0.22 -0.40 0.86 2.81 7.00 2.16 4.40
Mindtree Ltd. 7.00

7.00
6.00
5.00 4.40
4.00
2.81
3.00 2.16
2.00
0.86
1.00 0.22
0.00
-0.40
-1.00
1 SD-1 1 ED+10 ED+30
AB.Volume 0.22 -0.40 0.86 2.81 7.00 2.16 4.40

Inte rpretation:
place. As we know that the abnormality in the turnover remains negative till the
source date but after that abnormal volume increases as trading increases ny the
investors. Thus investors started trading in it more and abnormal volume is increasing
more on the effective date. So, more trading takes place between the source date and
effective date in order to earn short-term profit.


Date Price
25 May 2009 380
26 May 2009 371
27 May 2009 377 373.4
28 May 2009 369 372.2
29 May 2009 370 387.2 394.8
1 June 2009 374 408.4 410.12
2 June 2009 446 432.8 428.32 426.032
3 June 2009 483 450 443.44 438.488
4 June 2009 491 463.2 453.48 447.712 443.622
5 June 2009 456 462.8 457.08 452.504 448.635
8 June 2009 440 458.6 456.24 453.376 450.379 447.72
9 June 2009 444 450.8 452.28 451.096 449.387
10 June 2009 462 445.8 447.8 447.208 446.582
11 June 2009 452 443.4 442.08 442.752
12 June 2009 431 440.4 437.64 438.48
15 June 2009 428 430 433.96
16 June 2009 429 428.6 430.92
17 June 2009 410 427.4
18 June 2009 445 428.2
19 June 2009 425
22 June 2009 432


Post-acquisition
Date Price
23 June 2009 451
24 June 2009 453
25 June 2009 499 475.6
26 June 2009 483 479
29 June 2009 492 481.4 476.64
30 June 2009 468 476 475.2
1 July 2009 465 471.2 474.16 474.256
2 July 2009 472 468.4 472.72 473.856
3 July 2009 459 473.8 472.56 474.192 474.698
6 July 2009 478 474.2 474.64 474.904 475.464
7 July 2009 495 475.2 476.88 476.28 476.611 476.96
8 July 2009 467 481.6 477.72 478.088 478.077
9 July 2009 477 479.6 479.6 479.592 479.939
10 July 2009 491 478 481.6 481.52
13 July 2009 468 483.6 482.16 484.216
14 July 2009 487 485.2 486.52
15 July 2009 495 484.4 491.2
16 July 2009 485 501.4
17 July 2009 487 501.4
20 July 2009 553
21 July 2009 487


Mindtree Ltd.
480
476.96
475
470
465
460
455
450
447.72
445
440
435
430
Pre Post
Inte rpretation:

18. SOFTPRO LTD.

Mean
Daily
Cum. AB
Return 6.79% 4.75% 1.18% 15.11% 0.98% 3.72% 10.94% 0.36%
Softpro Ltd.
16.00% 15.11%
14.00%
12.00% 10.94%
%Cum.AB Return
10.00%
8.00% 6.79%
6.00% 4.75%
3.72%
4.00%
2.00% 1.18% 0.98%
0.00%
01 1
AB.Return 6.79% 4.75% 1.18% 15.11% 0.98% 3.72% 10.94%
Time Period

Softpro Ltd.
40.00%
35.00%
ED+30
30.00%
ED+10
% Cum. AB. return
25.00%
ED
20.00%
15.00%
10.00% SD
5.00%
0.00% SD-10
-5.00% SD-30
-10.00%
Days
Inte rpretation:
the Cum. AB return tends to remain very positive. We can see the line of return going
is very good script for the investor as overall it generates big positive Cum. AB return


1 Cum. Ab -19256.70 -5077.21 -4337.53 -36821.65 -3482.53 -32132.21 -38945.23
2 Days 30.00 10.00 1.00 45.00 1.00 10.00 30.00
Ave.Daily
3 Ab (1/2) -641.89 -507.72 -4337.53 -818.26 -3482.53 -3213.22 -1298.17
4 Ave.Vol. 6031.53
Ab/Ave
5 (3/4) -0.11 -0.08 -0.72 -0.14 -0.58 -0.53 -0.22
Softpro Ltd.
0.00
-0.10 -0.08
-0.11
-0.14
-0.20
-0.22
-0.30
-0.40
-0.50
-0.53
-0.60 -0.58
-0.70
-0.72
-0.80
TO TO TO TO TO
SD-1 SD-1 ED-1 ED+10 ED+30
AB.Volume -0.11 -0.08 -0.72 -0.14 -0.58 -0.53 -0.22
Inte rpretation:
place. But as we know that the abnormality in the turnover remains negative in the all
windows. It is because the return is positive so there is no supply of shares in the
market. Investors are holding the shares in order to earn high returns.


Date Price
2 July 2009 217.00
3 July 2009 221.65
6 July 2009 217.00 219.49
7 July 2009 219.30 222.06
8 July 2009 222.50 225.63 225.164
9 July 2009 229.85 228.15 227.656
10 July 2009 239.50 230.49 229.512 228.471
13 July 2009 229.60 231.95 230.074 229.261
14 July 2009 231.00 231.34 229.95 229.216 228.499
15 July 2009 229.80 228.44 229.112 228.41 227.903
16 July 2009 226.80 227.53 227.432 227.138 226.768 226.39
17 July 2009 225.00 226.3 225.482 225.492 225.25
20 July 2009 225.05 223.55 223.712 223.585 223.52
21 July 2009 224.85 221.59 221.722 221.627
22 July 2009 216.05 219.59 219.576 219.757
23 July 2009 217.00 217.58 217.642
24 July 2009 215.00 215.57 216.134
27 July 2009 215.00 213.88
28 July 2009 214.80 214.05
29 July 2009 207.60
30 July 2009 217.85


Post-acquisition
Date Price
3 August 2009 221.00
4 August 2009 228.40
5 August 2009 229.80 225.14
6 August 2009 221.55 223.74
7 August 2009 224.95 219.16 219.426
10 August 2009 214.00 215.2 216.738
11 August 2009 205.50 213.89 214.17 214.7
12 August 2009 210.00 211.7 212.308 212.713
13 August 2009 215.00 210.9 210.858 211.09 211.525
14 August 2009 214.00 209.85 209.49 209.891 210.438
17 August 2009 210.00 207.95 208.626 209.23 209.925 210.59
18 August 2009 200.25 207.05 208.174 209.267 210.08
19 August 2009 200.50 207.38 209 210.148 210.997
20 August 2009 210.50 208.64 211.046 211.865
21 August 2009 215.65 213.98 213.892 214.475
24 August 2009 216.30 218.18 217.212
25 August 2009 226.95 221.28 221.226
26 August 2009 221.50 223.98
27 August 2009 226.00 228.71
28 August 2009 229.15
31 August 2009 239.95


Softpro Ltd
230
226.39
225
220
215
210 210.59
205
200
Pre Post
Inte rpretation:
merger average share price was 226.39 which decreased to 210.59 after merger.
It shows that the Shareholders‘ wealth has decreased and the Company‘s market
beneficial to the Company .

19. H T MEDIA LTD.

Mean
Daily
Cum.
AB -
Return -3.49% 11.64% 2.39% 2.03% 1.13% 46.80% 25.13% 0.12%
H T Media Ltd.
50.00% 46.80%
40.00%
%Cum.AB Return
30.00% 25.13%
20.00%
11.64%
10.00%
2.39% 2.03%
0.00%
-1.13%
-3.49%
-10.00%
TO SD- TO SD-1 ED-1 ED+10 D+30
01
AB.Return -3.49% 11.64% 2.39% 2.03% -1.13% 46.80% 25.13%
Time Period

H T Media Ltd.
60.00%
50.00% ED+10
40.00%
30.00%
% Cum. AB. Return
ED+30
20.00%
10.00%
0.00% SD-30 SD
ED
-10.00%
-20.00%
SD-10
-30.00%
-40.00%
-50.00%
Days
Inte rpretation:
the Cum. AB return tends to remain positive and fluctuating. We can see the line of
return going upwards as the effective date arrives. So, it is an average script for the
investor as overall it generates big positive Cum. AB return throughout the event
period.


- - - - -
1 Cum. Ab 742589.50 322672.03 45779.58 1085903.95 122958.12 4999536.55 4657976.93
2 Days 30.00 10.00 1.00 167.00 1.00 10.00 30.00
Ave.Daily - -
3 Ab (1/2) -24752.98 -32267.20 45779.58 -6502.42 122958.12 499953.66 155265.90
4 Ave.Vol. 47240.58
Ab/Ave
5 (3/4) -0.52 -0.68 -0.97 -0.14 -2.60 10.58 3.29
H T Media Ltd.
12.00 10.58
10.00
8.00
6.00
3.29
4.00
2.00
0.00
-0.52 -0.14
-0.68 -0.97
-2.00
-2.60
-4.00
TO TO TO TO TO
SD-1 SD-1 ED-1 ED+10 ED+30
AB.Volume -0.52 -0.68 -0.97 -0.14 -2.60 10.58 3.29

Inte rpretation:
effective date. It is because the script gave low returns till effective date. After
effective date it showed positivity so investors started trading in it more and abnormal
volume is increasing on the effective date. So, more trading takes place on the
effective date in order to earn short-term profit.


Date Price
13 April 2009 60
15 April 2009 65
16 April 2009 67 64.2
17 April 2009 64 65.4
20 April 2009 65 65.4 65.12
21 April 2009 66 64.6 65.76
22 April 2009 65 66 66.16 66.216
23 April 2009 63 67.4 66.6 66.784
24 April 2009 71 67.4 67.44 67.224 67.1408
27 April 2009 72 67.6 67.96 67.592 67.4896
28 April 2009 66 68.8 67.96 67.888 67.7024 67.58
29 April 2009 66 68.6 68 67.96 67.8
4 May 2009 69 67.4 68.08 67.848 67.7904
5 May 2009 70 67.6 67.8 67.712
6 May 2009 66 68 67.4 67.544
7 May 2009 67 67.4 67.28
8 May 2009 68 66.6 67.16
11 May 2009 66 66.8
12 May 2009 66 67
13 May 2009 67
14 May 2009 68


Post-acquisition
Date Price
15 May 2009 68
18 May 2009 74
19 May 2009 77 79.8
20 May 2009 82 87.8
21 May 2009 98 96.6 94.96
22 May 2009 108 102.6 101.16
25 May 2009 118 108 106.36 104.928
26 May 2009 107 110.8 109.84 108.688
27 May 2009 109 113.8 112.32 111.384 110.338
28 May 2009 112 114 113.76 112.992 112.074
29 May 2009 123 115 114.64 113.696 112.915 112.13
1 June 2009 119 115.2 114.4 113.608 112.96
2 June 2009 112 115.2 113.36 112.896 112.362
3 June 2009 110 112.6 111.88 111.608
4 June 2009 112 108.8 110.2 110
5 June 2009 110 107.6 108.2
8 June 2009 100 106.8 106.36
9 June 2009 106 105.2
10 June 2009 106 103.4
11 June 2009 104
12 June 2009 101


HT Media Ltd.
120
112.13
100
80
67.58
60
40
20
0
Pre Post
Inte rpretation:
value has also increased. Therefore we can say that the merger be neficial to the
company and it is a successful merger.

20. PENTAMEDIA GRAPHICS LTD.

Mean
Daily
Cum. AB
Return -8.98% -1.06% -3.96% 28.48% -1.69% 14.53% 6.44% 0.09%
Pentamedia Graphics Ltd.

28.48%
30.00%
25.00%
20.00%
%Cum.AB Return
14.53%
15.00%
10.00% 6.44%
5.00%
0.00%
-1.06% -1.69%
-5.00% -3.96%
-10.00% -8.98%
TO TO SD-1 ED-1 ED+10 ED+30
SD-01
AB.Return -8.98% -1.06% -3.96% 28.48% -1.69% 14.53% 6.44%
Time Period


70.00%
60.00%
50.00%
40.00%
% Cum. AB. Return
30.00% ED+10
20.00%
ED+30
ED
10.00%
SD-30
0.00%
SD-10
-10.00%
SD
-20.00%
-30.00%
Days
Inte rpretation:
Cum. AB return. But it start becoming positive substantially between source date and
effective date. The above chart does not indicate perfect trend line for the company.
But in the long run the Cum. AB return tends to remain positive and fluctuating. We
can see the line of return going upwards as the effective date arrives but after that also
it fluctuates. So, it is an average script for the investor as overall it generates big
positive Cum. AB return throughout the event period.


- - -
1 Cum. Ab 140840.71 154660.71 35476.21 3011708.43 82950.21 658600.50 1237186.29
2 Days 30.00 10.00 1.00 312.00 1.00 10.00 30.00
Ave.Daily - -
3 Ab (1/2) 4694.69 15466.07 35476.21 -9652.91 82950.21 65860.05 41239.54
4 Ave.Vol. 206596.21
Ab/Ave
5 (3/4) 0.02 0.07 -0.17 -0.05 -0.40 0.32 0.20

0.40 0.32
0.30 0.20
0.20
0.07
0.10 0.02
0.00
-0.10 -0.05
-0.20 -0.17
-0.30
-0.40
-0.40
-0.50
TO SD- TO TO TO TO
1 SD-1 ED-1 ED+10 ED+30
AB.Volume 0.02 0.07 -0.17 -0.05 -0.40 0.32 0.20

Inte rpretation:
effective date. As script started giving positive returns after effective date, investors
started trading in it more and abnormal volume is increasing after effective date. So,
more trading takes place after effective date in order to earn as much as short term
profit.


Date Price
24 July 2009 2.21
27 July 2009 2.29
28 July 2009 2.37 2.292
29 July 2009 2.32 2.308
30 July 2009 2.27 2.3 2.2784
31 July 2009 2.29 2.254 2.2704
3 August 2009 2.25 2.238 2.2592 2.25984
4 August 2009 2.14 2.252 2.2472 2.25208
5 August 2009 2.24 2.252 2.244 2.24352 2.24242
6 August 2009 2.34 2.24 2.2396 2.23376 2.23232
7 August 2009 2.29 2.238 2.2276 2.22288 2.22085 2.22
10 August 2009 2.19 2.216 2.2104 2.20936 2.2083
11 August 2009 2.13 2.192 2.1928 2.19472 2.19557
12 August 2009 2.13 2.166 2.1764 2.1808
13 August 2009 2.22 2.152 2.1664 2.17008
14 August 2009 2.16 2.156 2.158
17 August 2009 2.12 2.166 2.1568
18 August 2009 2.15 2.15
19 August 2009 2.18 2.16
20 August 2009 2.14
21 August 2009 2.21


Post-acquisition
Date Price
24 August 2009 2.22
25 August 2009 2.32
26 August 2009 2.43 2.43
27 August 2009 2.55 2.524
28 August 2009 2.63 2.584 2.5496
31 August 2009 2.69 2.604 2.5824
1 September 2009 2.62 2.606 2.5984 2.5892
2 September 2009 2.53 2.594 2.6032 2.60442
3 September 2009 2.56 2.604 2.6124 2.61702 2.615604
4 September 2009 2.57 2.608 2.6257 2.62836 2.626672
7 September 2009 2.74 2.65 2.6454 2.63902 2.63448 2.63
8 September 2009 2.64 2.6725 2.6551 2.64454 2.637672
9 September 2009 2.74 2.6925 2.6565 2.64346 2.635292
10 September 2009 2.70. 2.6525 2.64 2.63298
11 September 2009 2.65 2.615 2.6203 2.61646
14 September 2009 2.58 2.5675 2.593
15 September 2009 2.49 2.574 2.5725
16 September 2009 2.55 2.556
17 September 2009 2.6 2.55
18 September 2009 2.56
22 September 2009


Penta Mediagraphics Ltd.
2.7
2.63
2.6
2.5
2.4
2.3
2.2 2.22
2.1
2
Pre Post
Inte rpretation:

21. UTV SOFTWARE COMMUNICATIONS LTD.

Mean
Daily
Cum. AB
Return -15.94% -3.05% 4.76% -4.08% 2.13% 6.80% -0.12% -0.06%
UTV Software Communications Ltd.
10.00%
6.80%
4.76%
5.00%
2.13%
%Cum.AB Return
0.00%
-0.12%
-3.05%
-5.00% -4.08%
-10.00%
-15.00%
-15.94%
-20.00%
SD-30 SD-10 SD SD+1-E ED ED+1-E ED+1-
TO SD- TO SD-1 D-1 D+10 ED+30
01
AB.Return -15.94% -3.05% 4.76% -4.08% 2.13% 6.80% -0.12%
Time Period


15.00%
10.00%
5.00%
0.00%
% Cum. AB. Return
SD-30
-5.00%
ED+10
-10.00%
SD
ED
-15.00% SD-10
ED+30
-20.00%
-25.00%
-30.00%
Days
Inte rpretation:
the Cum. AB return tends to remain negative and fluctuating. We can see the line of
return going upwards as the effective date arrives but after that also it is fluctuating.
So, it is a poor script for the investor as overall it generates big negative Cum. AB
return throughout the event period.


- - - - - - -
1 Cum. Ab 1257875.35 342549.60 52680.77 6289480.26 67764.77 304119.60 1307601.12
2 Days 30.00 10.00 1.00 171.00 1.00 10.00 30.00
Ave.Daily - -
3 Ab (1/2) -41929.18 -34254.96 52680.77 -36780.59 67764.77 -30411.96 -43586.70
4 Ave.Vol. 79352.77
Ab/Ave
5 (3/4) -0.53 -0.43 -0.66 -0.46 -0.85 -0.38 -0.55

0.00
-0.10
-0.20
-0.30
-0.40 -0.38
-0.50 -0.43 -0.46
-0.60 -0.53 -0.55
-0.70 -0.66
-0.80
-0.90 -0.85
TO TO TO TO TO
SD-1 SD-1 ED-1 ED+10 ED+30
AB.Volume -0.53 -0.43 -0.66 -0.46 -0.85 -0.38 -0.55
Inte rpretation:
place. But as we know that the abnormality in the turnover remains negative in the
every window. As it was gave negative returns, investors stayed away from trading it.


Date Price
7 December 2009 474.9
8 December 2009 484.95
9 December 2009 497.05 483.37
10 December 2009 485.1 481.83
11 December 2009 474.85 477.12 475.568
14 December 2009 467.2 468.84 472.032
15 December 2009 461.4 466.68 468.666 469.999
16 December 2009 455.65 465.69 466.656 468.552
17 December 2009 474.3 465 467.072 468.208 469.367
18 December 2009 469.9 467.07 468.336 469.102 470.027
21 December 2009 463.75 470.92 470.308 470.976 471.495 472.11
22 December 2009 471.75 473 473.136 473.297 473.592
23 December 2009 474.9 475.55 476.026 475.893 476.077
24 December 2009 484.7 479.14 478.678 478.694
29 December 2009 482.65 481.52 481.318 481.528
30 December 2009 481.7 484.18 484.31
31 December 2009 483.65 486.2 487.306
4 January 2010 488.2 490.51
5 January 2010 494.8 494.12
6 January 2010 504.2
7 January 2010 499.75


Post-acquisition
Date Price
11 January 2010 524.90
12 January 2010 517.35
13 January 2010 531.75 524.35
14 January 2010 523.90 530.81
15 January 2010 523.85 535.47 531.066
18 January 2010 557.20 534.51 531.548
19 January 2010 540.65 530.19 528.674 525.974
20 January 2010 526.95 526.76 522.73 521.718
21 January 2010 502.30 516.44 515.854 516.236 516.061
22 January 2010 506.70 505.75 509.784 510.55 511.368
25 January 2010 505.60 500.13 504.136 505.829 507.114 508.01
27 January 2010 487.20 499.84 500.248 502.508 503.808
28 January 2010 498.85 498.52 499.122 500.445 501.708
29 January 2010 500.85 497 499.25 499.707
1 February 2010 500.10 500.12 499.468 500.052
2 February 2010 498.00 500.77 500.446
3 February 2010 502.80 500.93 501.972
4 February 2010 502.10 503.41
5 February 2010 501.65 504.63
6 February 2010 512.50
8 February 2010 504.10


520
510
508.01
500
490
480
472.11
470
460
450
Pre Post
Inte rpretation:
It shows that the Shareholders‘ wealth has increased and the Company‘s market

22. BIOCON LTD.
Mean
Daily
Cum.
AB -
Return 0.66% 8.34% 0.02% 0.63% 0.88% 5.06% 1.39% 0.02%
Biocon Ltd.
9.00% 8.34%
8.00%
7.00%
6.00% 5.06%
%Cum.AB Return
5.00%
4.00%
3.00%
2.00% 1.39%
0.66% 0.63% 0.88%
1.00%
0.00%
-0.02%
-1.00%
SD-30 SD-10 SD SD+1- ED ED+1-E ED+1-
TO TO SD- ED-1 D+10 ED+30
SD-01 1
AB.Return 0.66% 8.34% -0.02% 0.63% 0.88% 5.06% 1.39%
Time Period

Biocon Ltd.
15.00%
10.00%
% Cum. AB. Return
ED+10
5.00%
ED ED+30
SD-30
SD
0.00%
-5.00%
SD-10
-10.00%
Days
Inte rpretation:
upwards as the effective date arrives. So, it is a good script for the investor as overall
it generates big positive Cum. AB return throughout the event period.


- - -
1 Cum. Ab 394145.55 1095180.39 64668.48 2918317.91 145009.52 985034.82 245258.98
2 Days 30.00 10.00 1.00 61.00 1.00 10.00 30.00
Ave.Daily -
3 Ab (1/2) 13138.18 109518.04 64668.48 -47841.28 145009.52 98503.48 -8175.30
4 Ave.Vol. 266601.52
Ab/Ave
5 (3/4) 0.05 0.41 0.24 -0.18 -0.54 0.37 -0.03
Biocon Ltd.
0.50 0.41
0.37
0.40
0.30 0.24
0.20
0.05
0.10
0.00
-0.10 -0.03
-0.20 -0.18
-0.30
-0.40
-0.50
-0.60 -0.54
TO TO TO TO TO
SD-1 SD-1 ED-1 ED+10 ED+30
AB.Volume 0.05 0.41 0.24 -0.18 -0.54 0.37 -0.03

Inte rpretation:
place. But as we know that the abnormality in the turnover remains positive till the
source date. Then abnormal volume goes down till the effective date. It again rises on
1 day after effective date. We can relate these fluctuations to the abnormal return
generated by script. Smart investors started trading on days where it started to give
positive price return and stayed away on the days when it gave low returns.


Date Price
9 December 2009 293.20
10 December 2009 287.15
11 December 2009 280.95 281.9
14 December 2009 277.35 278.48
15 December 2009 270.85 277.44 278.352
16 December 2009 276.10 277.08 277.664
17 December 2009 281.95 276.86 277.896 278.239
18 December 2009 279.15 278.46 278.348 278.51
21 December 2009 276.25 279.64 278.936 278.988 278.976
22 December 2009 278.85 279.7 279.706 279.418 279.317
23 December 2009 282.00 280.02 280.054 279.724 279.635 279.62
24 December 2009 282.25 280.71 280.044 279.945 279.919
29 December 2009 280.75 280.2 279.88 280.103 280.244
30 December 2009 279.70 279.59 280.04 280.405
31 December 2009 276.30 278.88 280.496 281.042
4 January 2010 278.95 280.82 281.564
5 January 2010 278.70 282.99 283.232
6 January 2010 290.45 285.54
7 January 2010 290.55 287.93
8 January 2010 289.05
11 January 2010 290.90


Post-acquisition
Date Price
13 January 2010 298.30
14 January 2010 298.35
15 January 2010 298.65 296.3
18 January 2010 292.50 295.07
19 January 2010 293.70 291.75 291.248
20 January 2010 292.15 288.2 287.732
21 January 2010 281.75 284.92 283.338 283.315
22 January 2010 280.90 278.72 279.108 279.345
25 January 2010 276.10 273.1 275.15 275.65 276.265
27 January 2010 262.70 270.6 271.398 272.647 273.361
28 January 2010 264.05 268.41 269.258 270.365 271.096 271.71
29 January 2010 269.25 266.16 268.322 268.8 269.476
1 February 2010 269.95 268.02 267.696 268.019 268.359
2 February 2010 264.85 268.42 267.324 267.547
3 February 2010 272.00 267.47 267.494 267.066
4 February 2010 266.05 266.55 266.9
5 February 2010 264.50 267.01 265.914
6 February 2010 265.35 265.05
8 February 2010 267.15 263.49
9 February 2010 262.20
10 February 2010 258.25

Chart showing comparison of average high prices pre and pos t-acquisition of
Biocon Ltd.
282
280 279.62
278
276
274
272 271.71
270
268
266
Pre Post
Inte rpretation:
merger average share price was 278.62 which decreased to 271.71 after merger.
It shows that the shareholders‘ wealth has decreased and the company‘s market value
has also decreased. Therefore we can say that the merger decision is not beneficial to
the Company.

23. CADILA HEALTHCARE LTD.

Mean
Daily
Cum. AB -
Return 11.22% 2.57% 0.59% 91.91% 1.78% 0.48% 8.39% 0.36%
Cadila Healthcare Ltd.

100.00% 91.91%
90.00%
80.00%
70.00%
%Cum.AB Return
60.00%
50.00%
40.00%
30.00%
20.00% 11.22% 8.39%
10.00% 2.57% 0.59% 0.48%
0.00%
-1.78%
-10.00%
TO SD- TO ED-1 ED+10 ED+30
01 SD-1
AB.Return 11.22% 2.57% 0.59% 91.91% -1.78% 0.48% 8.39%
Time Period


140.00%
120.00%
ED+10 ED+30
100.00%
ED
% Cum. AB. Return
80.00%
60.00%
40.00%
20.00%
SD
SD-10
0.00%
SD-30
-20.00%
Days
Inte rpretation:
upwards as the effective date arrives and it also being stagnant. So, it is a good script
for the investor as overall it generates big positive Cum. AB return throughout the
event period.


1 Cum. Ab -18519.34 -37735.32 -5870.39 -370516.34 -861.39 -11812.55 59191.82

2 Days 30.00 10.00 1.00 359.00 1.00 10.00 30.00
Ave.Daily
3 Ab (1/2) -617.31 -3773.53 -5870.39 -1032.08 -861.39 -1181.25 1973.06
4 Ave.Vol. 9853.39
Ab/Ave
5 (3/4) -0.06 -0.38 -0.60 -0.10 -0.09 -0.12 0.20

0.30
0.20
0.20
0.10
0.00
-0.10 -0.06 -0.09
-0.10 -0.12
-0.20
-0.30
-0.40 -0.38
-0.50
-0.60 -0.60
TO TO TO TO TO
SD-1 SD-1 ED-1 ED+10 ED+30
AB.Volume -0.06 -0.38 -0.60 -0.10 -0.09 -0.12 0.20
Inte rpretation:
place. But as we know that the abnormality in the turnover remains negative till the 10
days after the effective date. The strategy of investors is to hold the securities more

and opt for high price returns. After a month of effective date abnormal volume is
increasing because few investors are satisfied with the return that they got in such a
long time and are selling the shares.


Date Price
2 January 2009 284.05
5 January 2009 275.7
6 January 2009 275.05 275.81
7 January 2009 274.1 271.12
9 January 2009 270.15 267.31 267.826
12 January 2009 260.6 264.01 264.382
13 January 2009 256.65 260.88 261.614 262.176
14 January 2009 258.55 258.59 259.452 259.767
15 January 2009 258.45 257.28 257.608 257.613 257.706
16 January 2009 258.7 256.5 255.78 255.556 255.51
19 January 2009 254.05 254.79 253.61 253.415 253.371 253.48
20 January 2009 252.75 251.74 251.332 251.198 251.323
21 January 2009 250 247.74 248.744 249.074 249.472
22 January 2009 243.2 245.89 246.524 247.372
23 January 2009 238.7 243.56 245.162 246.303
27 January 2009 244.8 243.69 245.096
28 January 2009 241.1 244.93 245.988
29 January 2009 250.65 247.41
30 January 2009 249.4 250.35
2 February 2009 251.1
3 February 2009 259.5


Post-acquisition
Date Price
4 February 2009 260.4
5 February 2009 260.1
6 February 2009 260 261.22
9 February 2009 260.55 263.09
10 February 2009 265.05 264.87 264.508
11 February 2009 269.75 266.21 265.694
12 February 2009 269 267.15 266.32 265.816
13 February 2009 266.7 267.15 266.44 265.934
16 February 2009 265.25 266.22 266.116 265.576 265.197
17 February 2009 265.05 265.47 265.102 264.853 264.529
18 February 2009 265.1 264.59 263.904 263.808 263.559 263.33
19 February 2009 265.25 262.08 262.702 262.473 262.37
20 February 2009 262.3 261.16 261.216 261.083 261.01
24 February 2009 252.7 260.21 259.44 259.631
25 February 2009 260.45 258.04 258.154 258.056
26 February 2009 260.35 255.71 256.642
27 February 2009 254.4 255.65 254.828
2 March 2009 250.65 253.6
3 March 2009 252.4 251.14
4 March 2009 250.2
5 March 2009 248.05


Cadila Healthcare LTD.
266
264
263.33
262
260
258
256
254
253.48
252
250
248
Pre Post
Inte rpretation:

24. PLETHICO PHARMACEUTICALS LTD.

Mean
Daily
Cum. AB
Return -8.30% 2.33% 8.82% -21.81% 0.58% -31.01% -1.68% -0.22%
Plethico Pharmaceuticals Ltd.

8.82%
10.00%
5.00% 2.33% 0.58%
0.00%
%Cum.AB Return
-1.68%
-5.00%
-10.00% -8.30%
-15.00%
-20.00%
-21.81%
-25.00%
-30.00%
-31.01%
-35.00%
TO SD- TO SD-1 ED-1 D+10 D+30
01
AB.Return -8.30% 2.33% 8.82% -21.81% 0.58% -31.01% -1.68%
Time Period


20.00%
SD-30
0.00%
SD
-20.00% SD-10
% Cum. AB. Return
-40.00%
-60.00%
-80.00%
-100.00% ED+10
ED
-120.00% ED+30
-140.00%
Days
Inte rpretation:
Cum. AB return. But it rises substantially between source date and effective date and
suddenly falls before few days of the effective date. The above chart does not indicate
perfect trend line for the company. But in the long run the Cum. AB return tends to
remain negative. We can see the line of return going downwards as the effective date
arrives. So, it is a poor script for the investor as overall it generates big negative Cum.
AB return throughout the event period.


1 Cum. Ab -116025.86 -9717.07 5293.79 12542541.57 -11302.21 -57336.29 -18647.07

2 Days 30.00 10.00 1.00 666.00 1.00 10.00 30.00
Ave.Daily
3 Ab (1/2) -3867.53 -971.71 5293.79 18832.65 -11302.21 -5733.63 -621.57
4 Ave.Vol. 12141.21
Ab/Ave
5 (3/4) -0.32 -0.08 0.44 1.55 -0.93 -0.47 -0.05
Plethico Pharmaceutical Ltd.

2.00
1.55
1.50
1.00
0.44
0.50
0.00
-0.08 -0.05
-0.50 -0.32
-0.47
-1.00 -0.93
TO TO SD- TO TO TO
SD-1 1 ED-1 ED+10 ED+30
AB.Volume -0.32 -0.08 0.44 1.55 -0.93 -0.47 -0.05

Inte rpretation:
source date. Those smart investors who realized that there will be negative effect on
returns exited the script in time between source date and effective date. Those
investors who did not sell it before effective date had to hold the shares in order to
wait for the positive returns. As soon as script start giving positive returns abnormal
volume will increase.


Date Price
27 October 2008 125.50
28 October 2008 130.80
29 October 2008 127.55 130.56
31 October 2008 131.20 134.38
3 November 2008 137.75 138.17 138.178
4 November 2008 144.60 141.81 142.134
5 November 2008 149.75 145.97 145.788 145.182
6 November 2008 145.75 150.34 148.704 148.014
7 November 2008 152.00 152.65 151.106 149.958 148.875
10 November 2008 159.60 152.75 152.338 150.784 149.589
11 November 2008 156.15 153.82 151.852 150.436 149.152 148.02
12 November 2008 150.25 152.13 149.922 148.75 147.564
14 November 2008 151.10 147.91 146.964 145.83 144.939
17 November 2008 143.55 143 142.676 142.02
18 November 2008 138.50 137.96 137.738 137.66
19 November 2008 131.60 132.38 132.798
20 November 2008 125.05 127.44 128.122
21 November 2008 123.20 123.21
24 November 2008 118.85 119.62
25 November 2008 117.35
26 November 2008 113.65


Post-acquisition
Date Price
1 December 2008 117.00
2 December 2008 122.45
3 December 2008 122.45 123.66
4 December 2008 126.10 126.47
5 December 2008 130.30 129.02 128.754
8 December 2008 131.05 131.49 130.888
10 December 2008 135.20 133.13 132.806 132.319
11 December 2008 134.80 134.33 134.136 133.68
12 December 2008 134.30 136.06 135.012 134.668 134.22
15 December 2008 136.30 135.67 135.556 135.172 134.734
16 December 2008 139.70 135.87 135.83 135.262 134.801 134.33
17 December 2008 133.25 135.85 135.324 134.89 134.382
18 December 2008 135.80 135.7 134.586 134.012 133.501
19 December 2008 134.20 133.53 133.156 132.575
22 December 2008 135.55 131.98 131.162 130.765
23 December 2008 128.85 128.72 128.648
24 December 2008 125.50 125.88 126.274
26 December 2008 119.50 123.13
29 December 2008 120.00 121.66
30 December 2008 121.80
31 December 2008 121.50


150
148.02
145
140
135 134.33
130
125
Pre Post
Inte rpretation:
merger average share price was 148.02 which decreased to 134.33 after
merger. It shows that the shareholders‘ wealth has decreased and the company‘s
market value has also decreased. Therefore we can say that the merger decision is
not beneficial to the company.

25. J P ASSOCIATES LTD.

Mean
Daily
Cum. AB - -
Return 11.34% -6.21% 0.25% -32.19% 1.30% -1.88% -5.37% -0.14%
JP Associates LTD.
15.00% 11.34%
10.00%
5.00%
0.00%
%Cum.AB Return
-0.25% -1.30%
-5.00% -1.88%
-6.21% -5.37%
-10.00%
-15.00%
-20.00%
-25.00%
-30.00%
-32.19%
-35.00%
TO TO D-1 D+10 D+30
SD-01 SD-1
AB.Return 11.34% -6.21% -0.25% -32.19% -1.30% -1.88% -5.37%
Time Period

30.00%
JP Associates Ltd.
20.00%
SD-10
10.00% SD
% Cum. AB. Return
0.00% SD-30
-10.00%
-20.00%
ED ED+10
-30.00% ED+30
-40.00%
Days
Inte rpretation:
downwards as the effective date arrives. So, it is a poor script for the investor as
overall it generates big negative Cum. AB return throughout the event period.

ED+1
SD-30 to SD-10 to SD+1 to ED+1 to to
-
- - - - - 882095
1 Cum. Ab 3444281.12 592662.29 1507415.95 4828926.17 122234.95 8948743.61 6.88
2 Days 30.00 10.00 1.00 155.00 1.00 10.00 30.00
-
Ave.Daily - - 294031.
3 Ab (1/2) -114809.37 59266.23 1507415.95 -31154.36 122234.95 -894874.36 90
672861
4 Ave.Vol. 3.95
Ab/Ave
5 (3/4) -0.02 0.01 -0.22 0.00 -0.02 -0.13 -0.04
JP Associates Ltd.
0.05
0.01
0.00
0.00
-0.02 -0.02
-0.05 -0.04
-0.10
-0.15 -0.13
-0.20
-0.22
-0.25
TO TO SD- TO ED- TO TO
SD-1 1 1 ED+10 ED+30
AB.Volume -0.02 0.01 -0.22 0.00 -0.02 -0.13 -0.04

Inte rpretation:
every window. Here from the source date only abnormal returns fell so there was
consistent negative effect on returns. In such situation, investors held the shares for
long time and did not get involved in the trading as it would result into the losses.


Date Price
24 April 2009 125
27 April 2009 130
28 April 2009 129 133.8
29 April 2009 138 138.2
4 May 2009 147 139.6 139.04
5 May 2009 147 141.4 140.24
6 May 2009 137 142.2 140.32 139.84
7 May 2009 138 139.8 140.12 139.752
8 May 2009 142 138.6 139.48 139.624 140.018
11 May 2009 135 138.6 138.6 139.912 140.683
12 May 2009 141 138.2 139.6 140.96 142.106 143.03
13 May 2009 137 137.8 141.76 143.168 144.483
14 May 2009 136 144.8 145.36 146.864 147.862
15 May 2009 140 149.4 150.52 151.512
18 May 2009 170 156.6 157.08 156.808
19 May 2009 164 164 162.84
20 May 2009 173 170.6 168.24
21 May 2009 173 173.6
22 May 2009 173 176.4
25 May 2009 185
26 May 2009 178


Post-acquisition
Date Price
28 May 2009 191
29 May 2009 207
1 June 2009 220 211.8
2 June 2009 216 219.8
3 June 2009 225 224.6 220.36
4 June 2009 231 222 222.64
5 June 2009 231 223.6 222.64 221.304
8 June 2009 207 223.2 220.96 220.896
9 June 2009 224 219.8 219.92 219.584 219.082
10 June 2009 223 216.2 218.32 217.776 217.534
11 June 2009 214 216.8 216.08 215.848 215.547 215.29
12 June 2009 213 215.6 213.6 213.568 213.302
15 June 2009 210 212 211.32 210.96 210.989
16 June 2009 218 207.4 208.52 208.36
17 June 2009 205 204.8 205.28 206.208
18 June 2009 191 202.8 203.08
19 June 2009 200 199.4 202.84
22 June 2009 200 201
23 June 2009 201 206.2
24 June 2009 213
25 June 2009 217


Jaiprakas h Associates Ltd.
250
215.29
200
150 143.03
100
50
0
Pre Post
Inte rpretation:

26. PHOENIX MILLS LTD.

Mean
Daily
Cum. AB
Return -25.45% -12.45% 5.29% -205.37% 5.90% 6.65% -1.90% -1.08%
Phoenix Mills Ltd.

50.00%
5.29% 5.90% 6.65%
0.00%
-1.90%
-12.45%
-25.45%
%Cum.AB Return
-50.00%
-100.00%
-150.00%
-200.00%
-205.37%
-250.00%
SD-30 SD-10 SD SD+1-E ED ED+1-E ED+1-
TO SD- TO SD- D-1 D+10 ED+30
01 1
AB.Return -25.45% -12.45% 5.29% -205.37 5.90% 6.65% -1.90%
Time Period

Phoenix Mills Ltd.

50.00%
SD-30
0.00%
SD-10
SD
-50.00%
% Cum. AB. Return
-100.00%
-150.00%
-200.00%
ED ED+10
ED+30
-250.00%
-300.00%
Days
Inte rpretation:


1 Cum. Ab -24936.85 -27737.95 -624.85 3406634.60 431534.15 886696.90 1620502.00

2 Days 30.00 10.00 1.00 183.00 1.00 10.00 30.00
Ave.Daily
3 Ab (1/2) -831.23 -2773.80 -624.85 18615.49 431534.15 88669.69 54016.73
4 Ave.Vol. 10885.85
Ab/Ave
5 (3/4) -0.08 -0.25 -0.06 1.71 39.64 8.15 4.96
Phoenix Mills Ltd.

39.64
40.00
35.00
30.00
25.00
20.00
15.00
8.15
10.00 4.96
5.00 1.71
0.00
-0.08 -0.25 -0.06
-5.00
TO TO TO TO TO
SD-1 SD-1 ED-1 ED+1 ED+3
0 0
AB.Volume -0.08 -0.25 -0.06 1.71 39.64 8.15 4.96

Inte rpretation:
source date. Thus investors held shares for a period of time. But as price returns were
more becoming more negative, smart investors who did not wanted to take risk traded
for the shares on effective date. After effective date returns were still negative, so
trading volume came down.


Date Price
23 June 2008 223
24 June 2008 205
25 June 2008 202 196.2
26 June 2008 188 182.6
27 June 2008 163 169.2 170.24
30 June 2008 155 157.4 159.16
1 July 2008 138 145.8 149.8 151.792
2 July 2008 143 140.8 142.64 144.432
3 July 2008 130 135.8 137.12 138.616 139.885
4 July 2008 138 133.4 133.44 134.112 135.006
7 July 2008 130 129.8 130.08 130.472 131.032 131.68
8 July 2008 126 127.4 127.28 127.4 127.702
9 July 2008 125 124 124.44 124.56 124.792
10 July 2008 118 121.8 121.76 121.968
11 July 2008 121 119.2 119.24 119.56
14 July 2008 119 116.4 117.12
15 July 2008 113 114.8 115.24
16 July 2008 111 113.4
17 July 2008 110 112.4
18 July 2008 114
21 July 2008 114


Post-acquisition
Date Price
28 July 2008 182
29 July 2008 185
30 July 2008 190 187
31 July 2008 191 187.2
1 August 2008 187 190.4 190.96
4 August 2008 183 193.6 193.36
5 August 2008 201 196.6 196.28 195.312
6 August 2008 206 199 197.96 196.448
7 August 2008 206 201.8 198 196.576 195.266
8 August 2008 199 198.8 196.64 195.256 194.091
11 August 2008 197 193.8 194 192.736 191.96 191.25
12 August 2008 186 189.8 189.68 189.44 189.077
13 August 2008 181 185.8 185.36 185.792 185.869
14 August 2008 186 180.2 181.52 182.16
18 August 2008 179 177.2 178.4 179.216
19 August 2008 169 174.6 175.84
20 August 2008 171 174.2 174.96
21 August 2008 168 173
22 August 2008 184 175.8
25 August 2008 173
26 August 2008 183


Phoenix Ltd.
250
200
191.25
150
131.68
100
50
0
Pre Post
Inte rpretation:

27. SUNTECK REALTY LTD.

Mean
Daily
Cum. AB
Return 3.76% 2.66% -0.21% 38.79% -0.77% 4.05% 10.76% 0.29%
Sunteck Realty Ltd.

38.79%
40.00%
35.00%
30.00%
%Cum.AB Return
25.00%
20.00%
15.00% 10.76%
10.00%
3.76% 4.05%
5.00% 2.66%
0.00%
-0.21% -0.77%
-5.00%
TO SD- TO D-1 ED+10 D+30
01 SD-1
AB.Return 3.76% 2.66% -0.21% 38.79% -0.77% 4.05% 10.76%
Time Period

Sunteck Realty Ltd.

60.00%
ED+30
50.00%
ED+10
40.00% ED
% Cum. AB. Return
30.00%
20.00%
10.00%
SD
SD-10
0.00%
SD-30
-10.00%
Days
Inte rpretation:
upwards as the effective date arrives. So, it is a good script for the investor as overall
it generates big positive Cum. AB return throughout the event period.

SD-30 SD-10 to SD+1 to ED+1 to ED+1 to

No to SD-1 SD-1 SD ED-1 ED ED+10 ED+30
1 Cum. Ab 4265.12 -1961.63 -368.60 181404.53 2392.40 13442.77 38146.30

2 Days 30.00 10.00 1.00 155.00 1.00 10.00 30.00
Ave.Daily
3 Ab (1/2) 142.17 -196.16 -368.60 1170.35 2392.40 1344.28 1271.54
4 Ave.Vol. 2218.60
Ab/Ave
5 (3/4) 0.06 -0.09 -0.17 0.53 1.08 0.61 0.57
Sunteck Realty Ltd.

1.20 1.08
1.00
0.80
0.61 0.57
0.60 0.53
0.40
0.20 0.06
0.00
-0.09
-0.20 -0.17
TO SD- TO SD- TO TO TO
1 1 ED-1 ED+10 ED+30
AB.Volume 0.06 -0.09 -0.17 0.53 1.08 0.61 0.57

Inte rpretation:
source date. Thus investors started trading in it more when higher positive returns
were there so volume traded is increasing. Investors sold the shares in market to
liquidate their earnings.


Date Price
19 November 2008 1,249.90
20 November 2008 1,239.90
21 November 2008 1,265.50 1259.38
24 November 2008 1,243.00 1270.05
25 November 2008 1,298.60 1282.97 1279.46
26 November 2008 1,303.25 1289.16 1286.36
28 November 2008 1,304.50 1295.72 1290.5 1288.49
1 December 2008 1,296.45 1293.92 1291.88 1292.36
2 December 2008 1,275.80 1290.74 1294.25 1296.4 1297.96
3 December 2008 1,289.60 1289.87 1298.81 1302.02 1304.61
4 December 2008 1,287.35 1300.98 1306.58 1310.55 1313.07 1314.88
5 December 2008 1,300.15 1318.52 1318.56 1321.74 1323.45
8 December 2008 1,352.00 1332.8 1334.57 1334.64 1335.31
10 December 2008 1,363.50 1350.64 1350.17 1348.3
11 December 2008 1,361.00 1369.89 1363.31 1361.31
12 December 2008 1,376.55 1379.01 1374.91
15 December 2008 1,396.40 1384.2 1383.57
16 December 2008 1,397.60 1390.82
17 December 2008 1,389.45 1393.94
18 December 2008 1,394.10
19 December 2008 1,392.15


Post-acquisition
Date Price
22 December 2008 1,373
23 December 2008 1,339
24 December 2008 1,349 1353
26 December 2008 1,353 1353.6
29 December 2008 1,351 1364 1366.72
30 December 2008 1,376 1375.4 1376.96
31 December 2008 1,391 1387.6 1388.76 1387.88
1 January 2009 1,406 1404.2 1399.12 1399.88
2 January 2009 1,414 1412.6 1407.84 1415.19 1420.43
5 January 2009 1,434 1415.8 1426.72 1435.58 1443.22
6 January 2009 1,418 1419 1453.52 1463.64 1472.29 1477.92
7 January 2009 1,407 1482 1490.68 1501.81 1507.25
9 January 2009 1,422 1538.2 1539.44 1545.26 1546.41
10 January 2008 1,729 1598.4 1598.68 1589.96
11 January 2008 1,715 1659.6 1643.96 1631.37
14 January 2008 1,719 1715.2 1677.04
15 January 2008 1,713 1708.4 1697.72
16 January 2008 1,700 1703.6
17 January 2008 1,695 1701.8
18 January 2008 1,691
23 January 2008 1,710


Sunteck Realty Ltd.
1500
1477.92
1450
1400
1350
1314.88
1300
1250
1200
Pre Post
Inte rpretation:
merger. It shows that the Shareholders‘ wealth has increased and the
Company‘s Market value has also increased. Therefore we can say that the
merger beneficiary to the Company and it is a successful merger.

28. GILLANDERS ARBUTHNOT & COMPANY LTD

Mean
Daily
Cum. AB -
Return 9.05% 3.99% 0.37% -27.53% 4.64% -0.55% -7.82% -0.09%
Gillanders Arbuthnot & Company Ltd

9.05%
10.00%
3.99%
5.00% 0.37%
0.00%
%Cum.AB Return
-0.55%
-5.00% -4.64%
-10.00% -7.82%
-15.00%
-20.00%
-25.00%
-27.53%
-30.00%
TO SD- TO SD-1 D-1 D+10 D+30
01
AB.Return 9.05% 3.99% 0.37% -27.53% -4.64% -0.55% -7.82%
Time Period


40.00%
30.00%
20.00%
SD
10.00%
% Cum. AB. Return
SD-10
0.00%
SD-30
-10.00%
-20.00%
ED ED+10
-30.00%
ED+30
-40.00%
-50.00%
Days
Inte rpretation:
upwards as the effective date arrives. So, it is an average script for the investor as
overall it generates very low positive Cum. AB return throughout the event period.


- - - - -
1 Cum. Ab 405454.93 38493.16 41389.14 869771.58 17350.86 108039.02 340582.07
2 Days 30.00 10.00 1.00 322.00 1.00 10.00 30.00
Ave.Daily -
3 Ab (1/2) 13515.16 -3849.32 41389.14 -2701.15 17350.86 -10803.90 -11352.74
4 Ave.Vol. 19663.86
Ab/Ave
5 (3/4) 0.69 -0.20 2.10 -0.14 -0.88 -0.55 -0.58

2.50
2.10
2.00
1.50
1.00 0.69
0.50
0.00
-0.20 -0.14
-0.50
-0.55 -0.58
-1.00 -0.88
ED+10 ED+30
AB.Volume 0.69 -0.20 2.10 -0.14 -0.88 -0.55 -0.58

Inte rpretation:
source date. When it gave positive returns in early stage of the announcement, witty
investors sold the shares in the market. Suddenly when prices fell, remaining investors
held shares till the positive returns are realized.


Date Price
11 June 2008 72
12 June 2008 71
13 June 2008 72 72.2
16 June 2008 72 72.6
17 June 2008 74 73 72.56
18 June 2008 74 72.8 72.32
19 June 2008 73 72.2 71.76 71.592
20 June 2008 71 71 71.04 70.992
23 June 2008 69 69.8 70.28 70.304 70.2672
24 June 2008 68 69.4 69.56 69.592 69.5696
25 June 2008 68 69 68.88 68.856 68.8464 68.86
26 June 2008 71 68.6 68.2 68.104 68.136
27 June 2008 69 67.6 67.36 67.376 67.488
30 June 2008 67 66.4 66.52 66.752
1 July 2008 63 65.2 65.92 66.352
2 July 2008 62 64.8 65.76
3 July 2008 65 65.6 66.2
4 July 2008 67 66.8
7 July 2008 71 68.6
8 July 2008 69
9 July 2008 71


Post-acquisition
Date Price
10 July 2008 71
11 July 2008 69
14 July 2008 70 71
15 July 2008 72 71.4
16 July 2008 73 72 71.96
17 July 2008 73 72.6 72.4
18 July 2008 72 72.8 72.92 73.08
21 July 2008 73 73.2 73.6 73.816
22 July 2008 73 74 74.52 74.72 74.8784
23 July 2008 75 75.4 75.64 75.792 75.904
24 July 2008 77 77.2 76.92 76.984 77.0272 77.08
25 July 2008 79 78.4 78.28 78.208 78.2032
28 July 2008 82 79.6 79.56 79.432 79.3728
29 July 2008 79 80.8 80.64 80.6
30 July 2008 81 81.8 81.76 81.64
31 July 2008 83 82.6 82.76
1 August 2008 84 84 83.48
4 August 2008 86 84.6
5 August 2008 86 84.4
6 August 2008 84
7 August 2008 82


Gillanders Arbhuthnot & Company Ltd.
78
77.08
76
74
72
70
68.86
68
66
64
Pre Post
Inte rpretation:
value has also increased. Therefore we can say that the merge beneficiary to the

29. JBF INDUSTRIES LTD.

Mean
Daily
Cum. AB
Return -4.89% -3.35% 9.50% 2.16% 5.15% 4.46% -20.25% -0.03%
JBF Industries Ltd.

9.50%
10.00%
5.15% 4.46%
5.00% 2.16%
0.00%
%Cum.AB Return
-5.00% -3.35%
-4.89%
-10.00%
-15.00%
-20.00%
-20.25%
-25.00%
TO SD- TO SD-1 ED-1 ED+10 ED+30
01
AB.Return -4.89% -3.35% 9.50% 2.16% 5.15% 4.46% -20.25%
Time Period

JBF Industries Ltd.

50.00%
40.00%
30.00%
% Cum. AB. Return
20.00%
ED+10
ED
10.00%
SD
0.00% SD-10
SD-30
-10.00% ED+30
-20.00%
Days
Inte rpretation:
upwards as the effective date arrives. After effective date it falls. So, it is a good script
for the investor as overall it generates positive Cum. AB returns throughout the event
period.


1 Cum. Ab 81248.36 58758.45 -4613.09 -382868.82 -10324.09 -39198.64 88574.27

2 Days 30.00 10.00 1.00 227.00 1.00 10.00 30.00
Ave.Daily
3 Ab (1/2) 2708.28 5875.85 -4613.09 -1686.65 -10324.09 -3919.86 2952.48
4 Ave.Vol. 19015.09
Ab/Ave
5 (3/4) 0.14 0.31 -0.24 -0.09 -0.54 -0.21 0.16
JBF Industries Ltd.

0.40 0.31
0.30
0.14 0.16
0.20
0.10
0.00
-0.10
-0.09
-0.20
-0.21
-0.30 -0.24
-0.40
-0.50
-0.54
-0.60
TO TO TO TO TO
SD-1 SD-1 ED-1 ED+10 ED+30
AB.Volume 0.14 0.31 -0.24 -0.09 -0.54 -0.21 0.16

Inte rpretation:
place. But as we know that the abnormality in the turnover remains positive till the
source date. It is because investors expecting positive returns bought the shares. For
the period from source date to effective date there were high returns so investors did
not trade profit. After holding the shares for long time, investors sold the shares after
a month of effective date and realized their earnings.


Date Price
13 October 2008 54
14 October 2008 59
15 October 2008 54 57.2
16 October 2008 60 58.4
17 October 2008 59 58.6 58.6
20 October 2008 60 59.6 58.48
21 October 2008 60 59.2 57.28 56.464
22 October 2008 59 56.6 55.32 54.664
23 October 2008 58 52.4 52.64 52.376 52.2976
24 October 2008 46 48.8 49.6 50.032 50.2752
27 October 2008 39 46.2 47.04 47.952 48.4128 48.74
28 October 2008 42 44 45.56 46.352 46.9056
29 October 2008 46 43.8 44.92 45.352 45.8032
31 October 2008 47 45 44.64 44.84
3 November 2008 45 45.6 44.6 44.52
4 November 2008 45 44.8 44.48
5 November 2008 45 43.8 43.96
6 November 2008 42 43.2
7 November 2008 42 42.4
10 November 2008 42
11 November 2008 41


Post-acquisition
Date Price
12 November 2008 42
14 November 2008 40
17 November 2008 40 39.8
18 November 2008 39 39
19 November 2008 38 38.4 38.28
20 November 2008 38 37.6 37.44
21 November 2008 37 36.6 36.52 36.448
24 November 2008 36 35.6 35.52 35.488
25 November 2008 34 34.4 34.48 34.52 34.5584
26 November 2008 33 33.4 33.48 33.592 33.672
28 November 2008 32 32.4 32.6 32.744 32.8608 32.96
1 December 2008 32 31.6 31.88 32.016 32.152
2 December 2008 31 31.2 31.28 31.432 31.5616
3 December 2008 30 30.8 30.84 30.976
4 December 2008 31 30.4 30.56 30.64
5 December 2008 30 30.2 30.32
8 December 2008 30 30.2 30.2
10 December 2008 30 30
11 December 2008 30 30.2
12 December 2008 30
15 December 2008 31


JBF Industries Ltd.
60
50 48.74
40
32.96
30
20
10
0
Pre Post
Inte rpretation:

30. KAMADGIRI SYNTHETICS LTD.

Mean
Daily
Cum. AB
Return -10.87% 3.12% -15.21% -411.35% 3.31% -0.42% -32.77% -0.97%
Kamadgiri Synthetics Ltd.
50.00% 3.12% 3.31%
0.00%
-10.87% -0.42%
-15.21%
-50.00% -32.77%
-100.00%
%Cum.AB Return
-150.00%
-200.00%
-250.00%
-300.00%
-350.00%
-400.00%
-411.35%
-450.00%
TO TO SD-1 D-1 D+10 D+30
SD-01
AB.Return -10.87% 3.12% -15.21% -411.35% 3.31% -0.42% -32.77%
Time Period


100.00%
SD-30
0.00%
SD-10
SD
-100.00%
% Cum. AB. Return
-200.00%
-300.00%
-400.00%
ED ED+10
ED+30
-500.00%
Days
Inte rpretation:


- - - - - -
1 Cum. Ab 11704.00 11388.05 3257.79 838537.47 3665.79 29525.53 79266.58
2 Days 30.00 10.00 1.00 786.00 1.00 10.00 30.00
Ave.Daily - -
3 Ab (1/2) -390.13 1138.81 3257.79 -1066.84 3665.79 -2952.55 -2642.22
4 Ave.Vol. 5257.79
Ab/Ave
5 (3/4) -0.07 0.22 -0.62 -0.20 -0.70 -0.56 -0.50

0.30
0.22
0.20
0.10
0.00
-0.10 -0.07
-0.20
-0.20
-0.30
-0.40
-0.50
-0.50
-0.60 -0.56
-0.62
-0.70 -0.70
TO TO TO TO TO
SD-1 SD-1 ED-1 ED+10 ED+30
AB.Volume -0.07 0.22 -0.62 -0.20 -0.70 -0.56 -0.50

Inte rpretation:
every window. Thus investors stayed away from purchasing the shares as it was
giving negative returns. There was no demand for the shares so trading did not happen
and abnormal volume is negative.


Date Price
29 May 2009 26.75
1 June 2009 26.70
2 June 2009 26.55 26.83
3 June 2009 26.95 26.78
4 June 2009 27.20 26.48 26.616
5 June 2009 26.50 26.43 26.62
8 June 2009 25.20 26.56 26.776 27.0172
9 June 2009 26.30 26.85 27.204 27.4312
10 June 2009 27.60 27.56 27.87 28.0148 28.1172
11 June 2009 28.65 28.62 28.686 28.7068 28.7204
12 June 2009 30.05 29.76 29.538 29.416 29.3278 29.25
15 June 2009 30.50 30.64 30.236 30.0332 29.8587
16 June 2009 32.00 31.11 30.75 30.4684 30.2499
17 June 2009 32.00 31.05 30.956 30.6692
18 June 2009 31.00 31.19 30.862 30.6628
19 June 2009 29.75 30.79 30.542
22 June 2009 31.20 30.17 30.204
23 June 2009 30.00 29.51
24 June 2009 28.90 29.36
25 June 2009 27.70
26 June 2009 29.00


Post-acquisition
Date Price
1 July 2009 29.30
2 July 2009 30.45
3 July 2009 29.20 29.68
6 July 2009 28.60 29.42
7 July 2009 30.85 29.44 29.302
8 July 2009 28.00 29.1 29.006
9 July 2009 30.55 28.87 28.842 28.7972
10 July 2009 27.50 28.2 28.534 28.566
13 July 2009 27.45 28.6 28.302 28.4044 28.4384
14 July 2009 27.50 27.9 28.146 28.2516 28.3106
15 July 2009 30.00 27.94 28.198 28.1728 28.2356 28.28
16 July 2009 27.05 28.09 28.078 28.1584 28.1977
17 July 2009 27.70 28.46 28.14 28.1908 28.2034
20 July 2009 28.20 28 28.23 28.2148
21 July 2009 29.35 28.21 28.308 28.2804
22 July 2009 27.70 28.39 28.318
23 July 2009 28.10 28.48 28.406
24 July 2009 28.60 28.51
27 July 2009 28.65 28.44
28 July 2009 29.50
29 July 2009 27.35


29.4
29.2 29.25
29
28.8
28.6
28.4
28.28
28.2
28
27.8
27.6
Pre Post
Inte rpretation:
beneficial to the Company.

Mean Cumulative Abnormal Return
Time Window Mean Cumulative Abnormal Return

AD-30 TO AD-01 -2.25%
AD-10 TO AD-01 -0.49%
AD 1.18%
AD+01 TO ED-01 9.32%
ED 0.14%
ED+01 TO ED+10 2.54%
ED+01 TO ED+30 4.82%
MCAR
9.32%
10.00%
Mean Cum. Abnormal return
8.00%
6.00% 4.82%
4.00% 2.54%
2.00% 1.18%
0.14%
0.00%
-0.49%
-2.00% -2.25%
-4.00%
01 SD-01 01 ED+10 ED+30
Series1 -2.25% -0.49% 1.18% 9.32% 0.14% 2.54% 4.82%
Time Period
Inte rpretation:
Mean Cumulative Abnormal Return shows the average abnormal return for a given
window among the firms. We can see that it is low before the source date. As the
amalgamation is announced the cumulative abnormal return rises, this shows that
maximum investors were involved in intra-day trading. In order to gain short-term
profit, maximum investors opted for trading. Here maximum investors might be short-

term investors. On the effective date, return falls substantially. After that cumulative
abnormal return rises substantially. So here we can say that investors hold till the
effective date and after the effective date they go for the trading as the amalgamation
create effect in the market. Thus, on the basis of this chart we can say that
amalgamations of the companies bring positive returns for the investors.

Mean Average Abnormal Return

Time Window Mean Average Abnormal Return
SD-30 TO SD-01 -0.17%
SD-10 TO SD-01 -0.08%
SD 1.14%
SD+01 TO ED-01 -0.04%
ED 0.14%
ED+01 TO ED+10 0.52%
ED+01 TO ED+30 -0.76%
MAAR
1.14%
1.20%
1.00%
Mean Avg. Abnormal Return
0.80%
0.52%
0.60%
0.40%
0.14%
0.20%
0.00%
-0.08% -0.04%
-0.20% -0.17%
-0.40%
-0.60%
-0.80% -0.76%
01 SD-01 01 ED+10 ED+30
Series1 -0.17% -0.08% 1.14% -0.04% 0.14% 0.52% -0.76%
Time Period
Inte rpretation:
Mean Average Abnormal Return indicates the daily average return in a given window
among the firms. We can see in the above chart the abnormal average return is
negative till the amalgamation is announced. Here we can see that the average
abnormal return is highest on source date because of more intra-day trading. It is the
same case as MCAR. Afterwards, it falls substantially. After effective date it gives
positive returns to the investors. But in the long run means after a month of effective
date the average abnormal return is negative. This is again because of the huge supply
pressure that is generated by the amalgamation effect. So from the above two charts
we can say that it is better for any new investor to invest in the company as soon as
the amalgamation is announced and should sell of the shares immediately after the
effective date of amalgamation.

Mean of Average Daily Cumulative Abnormal Volume
Time Window Avg. daily Abnormal Volume

SD-30 TO SD-01 -2,18,246.30
SD-10 TO SD-01 -15,118.54
SD -28,136.35
SD+01 TO SD-01 1,55,702.98
ED 46,660.05
ED+01 TO ED+10 1,20,240.58
ED+01 TO ED+30 1,46,214.11
MADCAV
2,00,000.00
1,55,702.98 1,46,214.11
1,50,000.00 1,20,240.58
Avg. Daily AB Volume
1,00,000.00
46,660.05
50,000.00
0.00
-15,118.54
-50,000.00 -28,136.35
-1,00,000.00
-1,50,000.00
-2,00,000.00
-2,18,246.30
-2,50,000.00
TO TO TO ED- TO TO
SD-01 SD-01 01 ED+10 ED+30
Series1 -2,18,2 -15,118 -28,136 1,55,70 46,660. 1,20,24 1,46,21
Time Period
Inte rpretation:
MADCAV indicates the average daily cumulative abnormal volume among the firms.
As we can see in the above chart that the abnormal volume trading is very less before
the amalgamation is announced. But between the source date and effective date there

is a big jump in the abnormal volume traded. The huge volume trading indicates that
there is a good supply of the shares and at the same time new and small participation
might also take place. Afterwards the abnormal volume reduces due to non
participation of large investors. After effective date abnormal volume rises because
few companies have witnessed positive effect of amalgamation and few companies
had negative effect. But as we have seen in previous chapters, in most of the firms the
abnormal trading is quite high than expected. When we see such huge abnormal
volume effect in comparison to the price effect, we can clearly say that there is huge
abnormal trading taking place after the amalgamation but the demand pressure is so
high that it leads to increase in the price of the shares. So it results into positive
cumulative abnormal return.

Mean Ratio of AB Volume to Avg. Volume
Time Window Mean Ratio of AB Volume to Avg. Volume

SD-30 TO SD-01 0.015
SD-10 TO SD-01 0.014
SD 0.193
SD+01 TO ED-01 0.002
ED 3.002
ED+01 TO ED+10 0.134
ED+01 TO ED+30 0.038
Mean Ratio of AB Volume to Avg Volume

3.500
3.002
Ratio of AB Volume to Avg Volume
3.000
2.500
2.000
1.500
1.000
0.500 0.193 0.134 0.038

0.015 0.014 0.002
0.000
01 01 01 ED+10 ED+30
Series1 0.015 0.014 0.193 0.002 3.002 0.134 0.038
Time Period
Inte rpretation:
This ratio indicates how much times the abnormal volume traded greater than the
average volume traded. We can see that the ratio is very less than 1 before the source
date. This is because of the huge liquidity problem in the shares before the
announcement. Even between the source date and effective date ratio is very low. So
it indicates after the amalgamation is announced, investors prefer the amalgamation to

happen and price to be come down in the tradable range. The ratio is very high on
effective date and it is because of the immediate impact of an event. Ideally the ratio
should come down after the one day momentum and as we can see in the above graph
the ratio came down. It has decreased further after a month of effective date. So this
indicates that small investors took the advantage on effective date and opted for short-
term benefit. They sold the shares so after effective date there is no more trading in
shares.

Conclusions
 As per the objective of the project it is examined that there is the relation
between amalgamation and its impact on the prices of the stock. The
information about the amalgamation brings abnormality in the market and
market does perform efficiently.
 The movements in stock prices are and trading volumes are influenced by the
flow of new information in the market. When investors expect positive returns
they buy shares and expect that soon prices are going to be down they sell the
shares. These trading activities affect the trading volume of the shares.
 The amalgamation effects are reflected into the market price of the company
within the time period of few days before the source date to few days after the
effective date. Ultimately amalgamation gives good return to the shareholders.
 So it can be concluded from this project that there is linear relationship

between amalgamation decision and market price of the company for a limited
duration. Thereafter the markets start behaving efficiently and absorb a ll the
available information in the market.

References
Books:
 Mergers, Acquisitions & corporate restructuring by Prof. Godbole, first
edition, Vikas Publications, 2009
 Mergers Acquisitions and take over by Prof. H. R. Machiraju, by New Age
Publications, 2010
 Damodaran on Valuation, 2nd Edition by Prof. Aswath Damodaran. Wiley
India Publictions, 2009
 Mergers & Acquisitions by Prof. Thomas, Viva Publications, 2009
 ltancy Ansoff, H.igor, Corporate Strategy, New York: Mc-Graw- Hill,1965.
 Boston Consultancy Group, The Strategy Development Process, Boston: The
Boston Consulting Group, 1985.
Website:
 www.bseindia.com for historical prices as on 20 th January 2010.

 www.cmie.com for M&A deals data collection as on 18 th January 2010.
 www.moneycontrol.com for news results as and when required.

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[EVENT RETURN STUDY] Mergers & Acquisitions

1. Indian Economy- Mergers & Acquisitions

1 N. R. Institute of Business Management

The Top 10 acquisitions made by Indian companies worldwide

Tata Steel Corus Group plc UK 12,000 Steel

Hindalco Novelis Canada 5,982 Steel

Videocon Daewoo Electronics Corp. Korea 729 Electronics

Dr. Reddy‘s Labs Betapharm Germany 597 Pharmaceutical

Suzlon Energy Hansen Group Belgiu m 565 Energy

Ranbaxy Labs Terapia SA Ro mania 324 Pharmaceutical

Tata Steel Natsteel Singapore 293 Steel

Videocon Thomson SA France 290 Electronics

VSNL Teleglobe Canada 239 Teleco m

2 N. R. Institute of Business Management

2. Mergers & Acquisitions

In business or economics a merger is a combination of two companies into one larger

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 Market Extension Merger and Product Extension Merger

Market Extension Merger

Product Extension Merger

The contract vehicle for achieving a merger is a "merger sub".

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 Accretive mergers are those in which an acquiring company's earnings per

 Dilutive mergers are the opposite of above, whereby a company's EPS

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In case of hostile acquisitions, the company, which is to be bought has no

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2.1 Business Valuation

The five most common ways to evaluate a business are

Accurate business valuation is one of the most important aspects of M&A as

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Motives behind M&A

These motives are considere d to not add shareholde r value

 Diversification: While this may hedge a company against a downturn in an

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M&A Marketplace difficulties

 Concern for Secrecy

No marketplace currently exists for the mergers and acquisitions of privately

 Locating the Buyers

At present, the process by which a company is bought or sold can prove

 Costly middlemen services

An industry of professional "middlemen" (known variously as intermediaries,

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a one-time market for a one-time transaction. Certain types of merger and

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 Short run factors

 Long run factors

Cross border M&A

In a study conducted in 2000 by Lehman Brothers, it was found that, on average,

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upward movement in the target corporation's domestic currency (relative to the

Merger and Acquisition Process

The beginning to amalgamation may be made through common agreements between

The procedure is complex, involving not only the compromises or arrangements

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Top Management’s Commitments towards Merger and Amalgamation:

Search for a Merger Partner

i) Organizational history of business and promoters and capital structure

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Steps for Merger & Amalgamation

i) Particulars about transferee and transferor companies.

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