Sectoral Analysis of Economic and Operating Efficiency Post Merger in the Indian Banking and IT Sector – A Quantitative Research with Special Focus to India

Abstract

Mergers and acquisitions (M&A) are strategic management decisions aimed at enhancing corporate performance by consolidating resources, reducing operational costs, and achieving economies of scale. The study examines the sectoral analysis of economic and operating efficiency in the Indian banking and IT sector post-merger, utilizing quantitative research to evaluate the performance changes. The objective of the study is to investigate the pre- and post-merger financial performance of selected banks and IT firms in India and to determine the influence of M&A on the Non-Performing Assets (NPA) ratio of Indian banks and IT firms. Additionally, it analyze the effects of the M&A announcement decision on the security prices of selected banks and IT firms. The research focuses on key financial metrics including liquidity position, non-performing assets (NPA), total investments, total assets, and security prices to assess the impact of M&A on economic and operational efficiency. Furthermore, the study highlights substantial increases in security prices for both banking and IT firms post-merger, indicating heightened investor confidence and market perception of enhanced operational synergies. The findings state that there is a significant difference in the financial performance of selected banks and IT firms in India before and after mergers, and M&A has a significant impact on the NPA ratio of India banks and IT firms, leading to a decrease in NPA levels post-merger. It also states that the M&A announcement decision has a positive effect on the security prices of selected banks and IT firms. These trends underscore the effectiveness of mergers in driving financial performance and operational efficiencies within these sectors of the Indian economy. Overall, the research contributes to the understanding of how strategic consolidations can lead to economic growth and improved operational effectiveness in the banking and IT sectors of India.