An Event Study of M&A Announcements on Indian Banking and Automobile Firms

Abstract

It has been discovered that Mergers and Acquisitions (M&A) exhibit varying levels of intensity over time, with certain periods characterized by heightened activity and others by reduced deal activity. The comparative analysis of the impact of M&A announcements on shareholders' wealth during these distinct periods has received limited scholarly attention. This paper seeks to examine and contrast the wealth effects of M&A announcements during different phases of deal activity within the Indian Banking and Automobile sectors from 2006 to 2020.

The standard event study methodology was employed to estimate abnormal returns and cumulative abnormal returns for acquiring firms in both domestic and global M&A announced during this timeframe. The results were evaluated and compared using both parametric and non-parametric tests. All analyses were conducted under the assumption that the Indian capital markets, along with certain international capital markets, operate efficiently in a semi-strong form.