Does the merger improve the operating performance of the company? Evidence from the beverage industry in India [version 2; peer review: 1 approved, 2 approved with reservations]

Background There is fierce market competition both locally and globally. Every organisation seeks to maintain itself and, more crucially, to develop quickly through inorganic means. The expansion of a company through mergers and acquisitions is an inorganic process. Organic growth takes a very long period and is time-bound, but inorganic growth through mergers may be achieved quickly. This research aimed to determine whether the operating results of Indian beverage firms have improved after the merger or not. Methods In order to assess merger-related advantages to the acquiring firms, this study used the operating performance technique, which contrasts the pre-merger and post-merger performance of corporations using accounting data. Secondary data were used to carry out this study. The operating performance was assessed on six operating parameters (ratios) i.e. Operating Profit Margin, Gross and Net Profit Margin, Debt-Equity, Return on Net Worth and Capital Employed. The comparison was done for three years pre and post-merger period of these operating ratios. Results The findings demonstrate that mergers do not seek to increase owner wealth. This finding shows that rather than just becoming larger and achieving covert goals, managers should pay more attention to post-merger integration challenges in order to produce merger-induced synergies. Conclusion This study shows that the M&As have not had a good effect on a company’s operating performance, especially for the chosen beverage companies in India. Since financial measures cannot fully account for the influence of mergers on business performance, future research may create other metrics for merger-related gains. Research that provides profound insights into the causes and trends of post-merger business performance through the different types of mergers and industries would also be beneficial

Financial Inclusion – Building a Success Model in the Indian Context

AbstractFinancial Inclusion is the delivery of financial services at an affordable cost to hitherto unbanked environments, especially the low-income and under-privileged. The Government of India and Reserve bank of India have taken initiatives to spread banking services such as expanding the number of rural bank branches, allowing the banking correspondent model and adoption of CBS technology. While it is a daunting challenge in size and scope, financial inclusion is also a great social and business opportunity. An attempt has been made in this paper to study the various financial inclusion models used in India - the challenges and a way out