Corporate Restructuring & Firms’ Performance: An Empirical Analysis of Selected Firms of Across Corporate Sectors in India

This paper examines the corporate (financial and Pondicherry University, operating) performance of Indianmanufacturing firms, following the merger event from the economic-finance Puducherry-605 008, Indiaperspective. The study is based on short run analysis of two periods: viz three years prior to merger, and threeE-mails: sathishvethathiri@yahoo.com years immediately after merger covering a period from 2004 to 2010. We tested two hypotheses whether there have been significant improvements in the corporate performance of Indian manufacturing corporate firms following the merger event, using a parametric statistical t-test. To measure the corporate performance, ratios such as current ratio, quick ratio, working capital turnover ratio, inventory turnover ratios, total asset turnover ratio, fixed asset turnover ratio, gross profit margin, net profit margin, operating leverage, net fixed assets relative to net worth and total liabilities relative to net worth areextensively used. Empirical results show mixed results of pre-and post-merger values computed. The study proves that Indian manufacturing corporate firms involved in merger& acquisition (M&A) have achieved an increase in the liquidity position, operating performance, profitability, and financial and operating risk. Further, it is inferred that the overall efficiency of acquirer firms is also increased. The statistical analysis also supports for a significant relationship between the pre and post M&As level of the corporate firms’performance.