FINANCIAL APPRAISAL OF MERGERS AND ACQUISITIONS IN INDIAN PHARMACEUTICAL SECTOR: A COMPARATIVE STUDY ON SELECT BSE LISTED COMPANIES

Abstract

The contemporary form of industrial ownership is defined by considerable mergers and acquisitions (M and As) activities globally, resulting in significant reshaping of numerous sectors; which are basically strategic decisions made by corporate entities that involve two or more companies joining together with shared ownership, resulting in the loss of their identities, aiming for inorganic growth (Shah, 2018). Financial performance of entity apparently subject to enhance following the basic motto of M and As as to extract the benefits of ‘synergy', as the positive outcome, derived from corporate combinations. The Indian pharmaceutical industry is a fragmented market with severe price competition and government price control. This study is focused on the performance analysis derived from corporate combinations as well as quantifying the same for the chosen sample companies in Indian pharmaceutical sector over a study period of ten years ranging between the financial year 2014- 2015 to 2023-2024. With the primary objective to account for the liquidity, solvency and profitability aspects as the indicators of financial conduct both for pre and post-merger and acquisition tenure, this study is also aimed at comparing those performance empirically over the study period. Study outcome exhibits mixed outcome with liquidity, solvency and profitability contrast which may be helpful specifically to the pharma entities who are looking for corporate combination as a way of strategic decision making.