Event Study: Financial and Valuation Impact of Mergers and Acquisitions

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ABSTRACT

The objective of this report is to find out the financial and valuations impact of corporate action like Mergers
and Acquisitions on the acquiring company by studying past four mergers and acquisitions deals in India. The
approach adopted to carry out this study was an empirical method of study; particularly event study technique
was used in case of figuring out valuation impact on the acquiring company. The Study found out that there is
negative impact on the valuation as well as financials of the acquiring company after M&A deal.

Keywords Mergers and Acquisitions, Event Study, Financial performance, Valuation Impact.

EXECUTIVE SUMMARY

The purpose of the report was to analyse the past experience on financial and valuation impact of M&A action
on the company. To analyse financial performance pre and post M&A financial statements are used and stock
performance for evaluating valuation impact. This research is done under empirical event study. The
literatures referred in the report are all collected from trusted organisations. The limitations of the research
are that it does not incorporate impact which can be caused by additional confounding events occurred in the
event period and also the long-term impact M&A on company. The research states that it is more likely that
there is short term negative impact on valuations and financials of the acquiring company due to M&A action.

Contents

INTRODUCTION....................................................................................................................................................................... 2
LITERATURE REVIEW ............................................................................................................................................................... 4
HYPOTHESES and QUESTION .................................................................................................................................................. 7
RESEARCH METHODOLOGY .................................................................................................................................................... 8
ANALYSIS ............................................................................................................................................................................... 10
FINDINGS .............................................................................................................................................................................. 18
CONCLUSION......................................................................................................................................................................... 19

1
INTRODUCTION

Mergers and Acquisitions is one of the important corporate actions which is used when two or more companies
wish to combine themself to form single entity. In case of acquisition, bigger/ acquiring company purchases
51% other smaller (acquired) company by either buying 51% or more stake of its share capital or buy acquiring
their assets. In mergers, two or more companies combine together to form a new entity, unlike in case of
acquisitions, where acquired company just becomes a subsidiary of the acquired company. That’s the reason
why legal and all paperwork cost of merger is much higher that of acquisition action. Further, in this report,
mergers and acquisition will be called as M&A for convenience.

There are mainly three types of M&A deals, according to the types of companies involved in the deal:

Conglomerate M&A - When the companies involved in M&A are primarily of different industries and whose
businesses are not similar, then this M&A can be said to be Conglomerate deal.

Horizontal M&A - In Horizontal M&A, companies involved in the deal are those who operate in the same
industry, offering the same product/services, and often these companies are competitors.

Vertical M&A-In vertical M&A, companies involved operate in the same market but do not provide the exact
product/ service, rather deliver complimentary product/services. There can be a difference in the supply chain
as well as them.

Every corporate action may have its positive as well as negative impacts on the organization; M&A action is no
exception. However, it is difficult to predict and identify the overall significant influence caused to the company
on either side. An event study is a study of examining stock price reaction in the stock market around an event
of major corporate actions to determine the possible economic effect on the value of the firm due to such
corporate events. The event study has an assumption that the market follows the Efficient Market Hypothesis
(EMH), specifically a semi efficient market hypothesis. The market is said to be semi- efficient if company's
security price quickly reflects the publicly available information about the firm. According to an event study,
theory stock price will change according to the economic impact created on the valuation of the firm. Along
these lines, the system permits the researchers to use it for two principal purposes. One, to test the Efficient
Market Hypothesis (EMH) that is negated when unusual returns endure over a more extended time skyline
following an event. And two, it very well may be utilized to survey the quantitative impact of an event of either
major corporate activities or economy-wide shocks and administrative changes with the help of financial market
information, like stock price recorded over generally short periods.

The various benefits company can earn due to just undergoing M&A action can be:

Synergies - Companies can exploit the benefits of M&A by creating more value been together rather than other
been separate entities, by integrating talents, technology cross board, and cost reduction.

Growth – Conventional organic growth of companies can take many years of operations, but M&A action can
help increase the market capitalization of an organization radically.

Rivalry –It can help the company to expand more rapidly than their competitors reducing the rivalry powers
from them.

Tax – M&A can help companies to reduce their tax expenses. This is usually done by companies from high tax
rate countries like the USA. They acquire companies that are within any low tax rate country so that acquiring
company can transfer their profits to these companies to reduce their taxes earned from their profits.

2
Diversification - Company can achieve a reduction in risk associated with the failure of any single particular
market that they primarily operate in, by delivering a wide variety of products or services within the same or
different sectors.

Dominance –The Company can act as a sort of monopolistically way to the extent of any government
regulations. Companies can influence the overall industry much easily and can introduce new trends in favour
to increase their profits.

Disadvantage of M&A can be demonstrated by following points:

Takeover Premium - When the M&A deal occurs, generally acquiring company close the deal by paying some
or a lot of premium to the acquired company causing a financial stress to the acquiring company and that’s why
it is obvious for the stakeholders to be nervous and uneasy at the initial phase after M&A deal. That the reason
why most of the time in the very short term after the M&A is announced, shares of acquiring company fall and
that of acquired company surges due to premium in value that they have received.
Culture Differences –Sometimes, there is negative impact on organisations due to corporate cultural
differences. Companies might have different morals and code of conduct in their operation. This issues direct
affect the business operation.
Diseconomies of scale –companies after undergoing M&A can go through diseconomies of scale due to inability
to control and co-ordinate labour, capital in operation; due to increase in company’s size. This causes company’s
increased average cost in long term and reduction in profitability of the company.
Layoff Dilemma – Many M&A deals have its negative impact on employee retention. This is because as M&A
occurs, there are various changes seen in an organisation, which can lead to anxiety, stress, and confusion
among employees. There is also a fear of job security within this period causing lack of motivation to work,
eventually causing efficiency and profitability of the company.

In today’s highly competitive global market, if the company fails to develop new strategies to meet the rapidly
changing market demands, there is a great risk of business becoming obsolete. Thus Mergers and acquisitions
have become one of the best strategic for firms to have access to new technology and resources to provide
competitiveness to their product in the market by acquiring companies that might have great synergic benefit
to meet these fluctuating demands. It can be said that M&A action is an easy way around for the exponential
growth of the company. There was new rise in M&A actions observed in India in last decade, leading many high
value deals. In these deals, it was evident that there were high number of deals in which acquiring companies
were Indian and foreign company as acquired company. High cash inflows within Indian corporates, Indian
government policies to complement business activities, high growth rate of the economy and future prospects;
all these factors are responsible for this new trend observed in M&A action in India.

3
LITERATURE REVIEW

Event Study

The event study was first introduced way back in 1969 when the adjustment of stock price caused due to the
stock split corporate activity was examined by (Fama, Fisher, Jensen, & Roll, 1969).(Fama, 1970) introduced
three levels of market efficiency by empirical study– weak form, semi-strong form, and strong form. Semi-strong
form of market efficiency was accepted by many and the event study is based on this existence of this form of
market efficiency.(Fama, 1991) stated that event study “uncovers empirical regularities, many surprising, that
enrich our understanding of investment, financing, and corporate-control events, and give rise to interesting
theoretical work.”

Financial researchers were pleased by the reliability and clarity of basic steps involved in the event study, hence
methodology of event study become popular in use. Many other studies have empirically experienced the
reaction of stock prices to the announcement of unique information. Few of the popular researches related to
event study are described.(Bremer & Sweeney, 1991), as well as (Cox & Peterson, 1991), analyzed the stock
price market reaction after large price declines. Both studies demonstrated that there was significant positive
change in abnormal returns of the stock after enormous losses suffered by the stock. For the first time daily
return were used to study the impact of unpredictable corporate events on shareholder’s wealth (Brown &
Warner, 1985).

Mergers and Acquisition

Few early researches depicted that the unpredictability of the event isn't constantly refreshing since M&A are
a part of the organization's corporate procedure and rumour could spread before the official declaration of the
event.(Schwert, 1996) studied the relation between premerger announcement stock price run-up’s of acquiring
exchanged listed firms from 1975-1971 and the premium offering in the merger deal. He found out that there
was generally no any linear relation between pre announcement run-up and the increase in stock price (“Mark-
up”) post announcement. And with small replacement of run-up with the mark-up, the ran-up is the additional
cost to the acquiring firm and this conclusion has important stance for assessing the cost associated with insider
trading.

Estimation of event study periods

“Even if a researcher doing an event study has a strong comparative advantage at improving existing methods,
a good use of his time is still in reading old issues of the Wall Street Journal to more accurately determine event
dates” - (Brown & Warner, 1985).
The important of determining event dates was pointed out by them. This is for the most part because of the
poor result when applied to unpredictable events one like corporate action. They also stated the improvement
in the statistical correctness of event studies, when daily and exact dates of the events were used in the study.
Exact estimation periods are difficult to decide. The length of the estimation time frame is dependent upon the
trade-off between improved estimation exactness and potential parameter shifts. (Brown & Warner, 1985)
confirmed the need to reduce the event period in order to avoid voice of another event in the event study.

Estimation of normal returns

(Brown & Warner, 1980) introduced three unique models for finding normal return of any stock, the market
model approach, the market adjusted returns model and the mean adjusted returns model.

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Market Model (Mackinlay, 1997) The market model is a statistical model which studies the relationship
between returns of any particular stock/security with the return of the market portfolio. For any security i the
market model is:

Rit =αi + βiRmt+ εit ,

E(εit=0), var(εit) = σ2ε

Where Rit and Rmt are the period t returns of security i and market portfolio, respectively. εit is the zero mean
disturbance term.αi,βi, σ2ε are the parameters of the market model. The market portfolio used in the equation
for calculation should be wide ranging, include all sectors and overall reflect the market scenario accurately. For
Indian market, Indices like NIFTY50, SENSEX can be used.

Economic Models: (Mackinlay, 1997) states that the limitations of statistical models can be removed by the use
of economic models to find the normal returns. The two economic models that can restrict the statistical models
are Capital Asset Pricing Model (CAPM) and Asset Pricing Theory (APT). CAPM was initially developed by (Sharpe
W. F., 1964) and later further improved by (Lintner, 1995).CAPM is based on the concept that the normal return
of any asset can be determined with the help of its covariance with the return of market portfolio. APT was
introduced by (Ross, 1976). According to him, Asset pricing theory is a theory which believes that expected
return of an asset is linearly proportional to various risk factors like market portfolio, inflation, exchange rates,
market sentiment, interest rate fluctuations, production policies, etc. The main difference between CAPM and
APT is that CAPM believes that markets are efficient and APT believe that an asset can be mispriced and there
can be possible to earn risk free return in very short term.

Estimation of Abnormal Returns

(Corrado, 1989) introduced a non-parametric test of significance in event study.(Barber & Lyon, 1997) made a
significant chance in the actions of abnormal returns (AR) and the numerical test that empirical researchers
used, to determine abnormal returns of stock. Also (Brown & Warner, 1980) and (Brown & Warner,
1985)helped in improving empirical measurement and the significant of test statistics so as to identify abnormal
returns of stock over the event period. These all researches emphasises on the determination of abnormal
return calculated on a specific day, then evaluating its significance level compared with the estimation period
and then aggregating the abnormal returns over quite a few months. Similarly, this research paper aims at the
empirical excellence and description of test statistics for abnormal return calculated daily in event period and
cumulated over several event period days. Thus this is built on short term event period for daily returns of a
particular stock. Contrary to this, (Barber & Lyon, 1997), and other scholars certificated the empirical excellence
and description of test statistics in order to detect long term abnormal stock returns.

Research done using above core theories

In an event empirical study, (Datta & Pinches, 1992) proved that there is a negative impact observed on the
shareholder’s wealth of the acquiring company but there is a Positive impact on shareholder’s wealth of the
acquired company.

(Fuller, Netter, & Stegemoller, 2002) studied the firms that acquired 5 or more companies, which were either
public, private or even their subsidiaries and the short period returns of shareholders of the acquiring company
in. They found out that majority of times shareholders of the acquiring company gain abnormal returns when
company acquired private and their subsidiaries but lose when the public company was acquired.

5
(Knapp, Gart, & Chaudhry, 2006) research study inspected the propensity for linear correlation in parent bank
company’s profitability and found out significant evidence of retreatment to the industry’s mean profitability.
The paper also studied the effect of mean retreatment on the valuation of post-merger performance of bank
parent companies. The research concludes that when a modification is made for the mean retreatment, post-
merger results significantly surpass those of the industry in the first 5 years after the merger.

(Moeller, Schlingemann, & Stulz, 2004) tested 12,023 takeovers by public companies occurred in period from
1980 to 2001. They observed that the average of M&A event abnormal return of these companies was around
1.1%, but the average of the loss faced by the shareholders of the company was around $25 million on. This
inconsistency in the study suggested the existence of a size influence in mergers and acquisition event abnormal
return. The study concluded that the abnormal M&A event return of small acquiring company is roughly 2%
higher than the big acquiring companies regardless of their capital structure and the size effect is robust over
M&A deals.

(Mishra, Prakash, Karels, & Peterson, 2005) examined the contribution of the acquired banks in only the non-
conglomerate types of mergers (i.e., banks with banks), and discoveries overpoweringly statistically significant
confirmation that non-conglomerate types of mergers undoubtedly decrease the total as well as the
unsystematic risk although having no statistically significant effect on systematic risk.

(Mantravadi & Reddy, 2008) in their research study focused on the impact of mergers on the relative size and
operating performance of acquiring corporates by examining some pre- and post-merger financial ratios with a
sample of firms chosen from all mergers concerning public limited and traded companies in India between 1991
and 2003. The study used the following financial ratios: operating profit margin, gross profit margin, net profit
margin, return on net worth return on capital employed and debt-equity ratio .The results suggest that there
are slight deviations in terms of the impact on operating performance after mergers, when the acquiring and
acquired firms are of different relative sizes, as per the market value of equity.

(Dutta & Jog, 2009) studied around 1300 mergers and acquisitions deals in an Canadian market between the
period 1993 to 2002.They investigated the long term stock returns over post event period. They found out that
Canadian markets do not show any negative long term impact on the stock. This finding was a contrarian to the
many studies done on US markets prior to their study that showed negative impact on acquiring company’s
stock returns.

(Padmavathy & Ashok, 2012) tested the informational importance of merger announcement to the investors
to make abnormal return. The study established that the information of merger announcement does not help
the investors to gain any abnormal returns during event period.

In their study on mergers and acquisitions, (Sinha, Kaushik, & Chaudhary, 2012) studied the M&A deals in the
financial services sector, which occurred between the period of March 1993 to Feb 2010. The study stated that
majority of times we can observe positive effect on profitability of the acquiring company. But study also
concluded that the liquidity status of the acquiring company tend to decrease in first three years after the M&A
deal.

6
HYPOTHESES and QUESTION

Hypothesis 1: There is significant negative change in financial ratios of acquiring company after mergers and
acquisitions.

Ho (Null Hypothesis): There is significant negative change in financial ratios of acquiring company after mergers
and acquisitions.

Ha (Alternate Hypothesis): There is significant negative change in financial ratios of acquiring company after
mergers and acquisitions.

Hypothesis 2: There is significant increase in the share price of the acquiring company due to mergers and
acquisitions.

Ho: There is no significant increase in the share price of the acquiring company due to mergers and acquisitions.

Ha: There is significant increase in the share price of the acquiring company due to mergers and acquisitions.

Question- If significant impact is observed in either financials or valuations of acquiring company, find out
whether the impact is positive or negative.

7
RESEARCH METHODOLOGY

The steps which were involved in an event study conducted in this report are as follows:

1. Identifying the event in this report:

Sample number

I randomly decided to study four mergers and acquisitions deals in India.

Sampling selection Method

Convenience sampling method is used. The sample firms involved in M&A were selected based on the
availability of exact date of media announcements and official date of merger or acquisition across various
sources and further selecting the high value deals between them.

Data collection

All the announcement dates are collected from articles of the trustable sites like Economictimes and
Moneycontrol. And all official dates of mergers or acquisition are taken from official sites of acquiring company.

2. Identifying estimation and event windows:

I researched many relevant event studies reports published by renowned and trusted publications like Wiley,
Elsevier, etc. Majority of the studies selected 200 to 300 days as their estimation period for estimating alpha
and beta parameters; and the period between 20-30 days prior and 20-30 days post event announcement day
as their event period for estimating abnormal returns.

3. Estimating parameters using data in the estimation window:

Stock prices

All stock prices open and close data for four acquiring companies – Sunpharma, Vedanta, Ultratech cement, and
Ashok Leyland were taken from NSE (National Securities Exchange) site- www.nse.com from Equity product
historical data section.

-As Sunpharma and Ranaxy Laboratories deal was announced on 6th April 2014, data from 21st march 2013 to
20th April 2014 was taken from NSE, totally around 250 market days. These days were considered estimated
period and the period of 21st April to 26th May 2015, 60 market days were used as event period for the event
study of this deal.

-As Vedanta - Cairn India Ltd deal was announced on 11th April 2015, market days from 22nd April 2014 to 30th
April 2015 were considered as estimation period and market days 4th May to 27th July 2015 as event period.

-As Ultratech cement and Jaypee Associate deal was announced on 28th Feb 2016 and market days from 13th
Jan 2015 to 14th Jan 2016 were considered as estimation period and market days between 15th Jan to 18th April
2016 as event period.

-As Ashok Leyland - Hinduja Foundries deal was announced on and market days from 27th July 2015 to 28th July
2015th were considered as estimation period and market days 29th July to 28th Oct 2016 as event period.

8
Market Portfolio

NIFTY50 was taken as market portfolio for estimating alpha and beta parameters for all the four stocks. The
open and close price data for all the relevant days related to all these four deals were also taken from NSE site
from Product Indices historical prices section.

Workstation

Ms Excel was used for data storage and data analysis.

Estimating daily returns

Daily return of stock and market within estimation period was calculated by subtracting today’s close price by
previous day’s closing price divided by the previous day’s close price.

Estimating parameters

Alpha was estimated by using INTERCEPT Function () on excel using estimation period data

Beta was calculated using SLOPE Function () between daily market returns of stock and market within estimation
period.

4. Measure abnormal returns in the event window:

Expected Return

Expected return from the stock is calculated by putting values of alpha and beta parameters found earlier of
the stock. The expected return is calculated for each day within event period by using same day return of
NIFTY50 (Market portfolio) in market model equation.

Abnormal Return

Abnormal return is calculated by subtracting actual observed stock return for the day by the excepted return
calculated in previous step. Thus we get the abnormal return for each single day in an event period.

5. Aggregate abnormal returns

Cumulation of these abnormal returns for each day within event period is done.

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ANALYSIS

Financial Analysis

Sunpharma - Ranbaxy Labortotries

25th March 2015
Ratio 2018 2017 2016 2014 2013 2012 Average Significance
Pre Post
EPS 9 29 18.9 15.2 2.8 25.7 14.57 18.97 0.363
NI % 9.97 25.02 19.85 24.12 30.7 37.93 30.92 18.28 0.037
Return / Cap. Employed 11.13 21.7 18.35 13.43 16.81 19.71 16.65 17.06 0.436
Return / Asset 3.36 11.34 8.18 10.69 14.28 16.12 13.70 7.63 0.031
Debt / Equity 0.26 0.22 0.25 0.13 0.01 0.02 0.05 0.24 0.012
Asset Turnover 41.07 50.98 51.3 34.74 54.11 48.68 45.84 47.78 0.277
Current Ratio 1.59 1.28 2.28 3.12 3.76 3.93 3.60 1.72 0.012
EV / EBITDA 19.01 15.1 22.28 15.3 15.62 15.52 15.48 18.80 0.128

Vedanta - Cairn India

12th April 2017
Ratio 2020 2019 2018 2017 2016 2015
Average Significance
Pre Post
EPS -18 19.07 28.3 23.47 -41.38 -52.77 -23.56 9.79 0.236
NI % -9.78 10.53 14.9 15.67 -27.79 -15.43 -9.18 5.22 0.274
Return / Cap. Employed 11.72 15.09 19.1 16.86 7.82 -10.54 4.71 15.30 0.204
Return / Asset -3.62 3.49 5.59 3.49 -6.28 -8.22 -3.67 1.82 0.241
Debt / Equity 0.91 0.93 0.77 1.03 1.4 1.34 1.26 0.87 0.053
Asset Turnover 45.98 45.55 49.71 36.28 32.91 38.73 35.97 47.08 0.003
Current Ratio 0.91 0.78 0.82 0.93 1.34 1.49 1.25 0.84 0.087
EV / EBITDA 3.38 4.9 5.67 6.35 6.18 6.31 6.28 4.65 0.072

Ultratech Cement - Jaypee Associates

29th June 2017
Ratio 2020 2019 2018 2017 2016 2015 Average Significance
Pre Post
EPS 201.61 84.02 80.94 98.92 90.3 76.48 88.57 122.19 0.217
NI % 13.79 5.76 7.18 10.69 9.85 8.63 9.72 8.91 0.368
Return / Cap. Employed 11.52 8.78 10.7 13.31 8.37 7.75 9.81 10.33 0.370
Return / Asset 7.32 3.14 3.88 6.43 6.01 5.51 5.98 4.78 0.195
Debt / Equity 0.55 0.86 0.71 0.31 0.34 0.4 0.35 0.71 0.026
Asset Turnover 53.09 54.36 54.2 60.1 61.04 63.97 61.70 53.88 0.008
Current Ratio 0.9 0.83 1 1.6 0.91 0.8 1.10 0.91 0.271
EV / EBITDA 11.55 17.08 18.84 19.58 17.46 18.02 18.35 15.82 0.229

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 Ashok Leyland - Hinduja Foundries
7th June 2017
Ratio 2020 2019 2018 2017 2016 2015 Average Significance
Pre Post
EPS 1.15 7.08 6.02 5.91 2.4 0.48 2.93 4.75 0.3183
NI % 2.08 6.57 6.1 7.18 3.71 -1.39 3.17 4.92 0.3405
Return / Cap. Employed 11.1 18.32 19.67 17.52 4.88 1.14 7.85 16.36 0.1898
Return / Asset 0.88 5.31 5.25 5.95 3.07 0.68 3.23 3.81 0.4301
Debt / Equity 2.07 1.73 1.64 1.55 1.63 2.02 1.73 1.81 0.3937
Asset Turnover 57.57 84.85 88.36 85.76 95.77 78.57 86.70 76.93 0.2336
Current Ratio 1.03 1.08 1.02 1.07 1.08 0.96 1.04 1.04 0.4199
EV / EBITDA 11.09 7.96 13.32 10.47 13.13 19.78 14.46 10.79 0.1169

Valuation Analysis

1. Sunpharma analysis

Day from Sunpharma NIFTY Daily return

Date
Event date Prev Close Close Prev Close Close Sunpharma NIFTY
-280 21-02-2013 799.3 797.5 5943.05 5852.25 -0.23% -1.53%
-279 22-02-2013 797.5 811.55 5852.25 5850.3 1.76% -0.03%
-278 25-02-2013 811.55 822.05 5850.3 5854.75 1.29% 0.08%
-277 26-02-2013 822.05 799.4 5854.75 5761.35 -2.76% -1.60%
till
-31 20-02-2014 623.3 619.65 6152.75 6091.45 -0.59% -1.00%

Alpha 0.000243326

Beta 0.744277482

Day from Sunpharma NIFTY Daily return Excepted Abnormal

Date CAR
Event date Prev Close Close Prev Close Close Sunpharma NIFTY Return Return
-30 21-02-2014 619.65 615.15 6091.45 6155.45 -0.73% 1.05% 0.76% -1.48% -1.48%
-29 24-02-2014 615.15 620.6 6155.45 6186.1 0.89% 0.50% 0.35% 0.54% -0.94%
-28 25-02-2014 620.6 619.05 6186.1 6200.05 -0.25% 0.23% 0.14% -0.39% -1.34%
-27 26-02-2014 619.05 628.1 6200.05 6238.8 1.46% 0.62% 0.44% 1.02% -0.32%
-26 28-02-2014 628.1 644.7 6238.8 6276.95 2.64% 0.61% 0.43% 2.21% 1.90%
-25 03-03-2014 644.7 625.1 6276.95 6221.45 -3.04% -0.88% -0.68% -2.36% -0.46%
-24 04-03-2014 625.1 619.4 6221.45 6297.95 -0.91% 1.23% 0.89% -1.80% -2.26%
-23 05-03-2014 619.4 623.7 6297.95 6328.65 0.69% 0.49% 0.34% 0.36% -1.91%
-22 06-03-2014 623.7 621 6328.65 6401.15 -0.43% 1.15% 0.83% -1.26% -3.17%
-21 07-03-2014 621 612.3 6401.15 6526.65 -1.40% 1.96% 1.43% -2.84% -6.01%
-20 10-03-2014 612.3 597 6526.65 6537.25 -2.50% 0.16% 0.10% -2.60% -8.60%

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-19 11-03-2014 597 580.25 6537.25 6511.9 -2.81% -0.39% -0.31% -2.49% -11.09%
-18 12-03-2014 580.25 604.3 6511.9 6516.9 4.14% 0.08% 0.03% 4.11% -6.98%
-17 13-03-2014 604.3 572.95 6516.9 6493.1 -5.19% -0.37% -0.30% -4.89% -11.87%
-16 14-03-2014 572.95 582.05 6493.1 6504.2 1.59% 0.17% 0.10% 1.49% -10.39%
-15 18-03-2014 582.05 579.35 6504.2 6516.65 -0.46% 0.19% 0.12% -0.58% -10.97%
-14 19-03-2014 579.35 585.3 6516.65 6524.05 1.03% 0.11% 0.06% 0.97% -10.00%
-13 20-03-2014 585.3 590.2 6524.05 6483.1 0.84% -0.63% -0.49% 1.33% -8.67%
-12 21-03-2014 590.2 580.4 6483.1 6493.2 -1.66% 0.16% 0.09% -1.75% -10.43%
-11 22-03-2014 580.4 584.45 6493.2 6494.9 0.70% 0.03% 0.00% 0.70% -9.72%
-10 24-03-2014 584.45 579.3 6494.9 6583.5 -0.88% 1.36% 0.99% -1.87% -11.60%
-9 25-03-2014 579.3 579.3 6583.5 6589.75 0.00% 0.09% 0.05% -0.05% -11.64%
-8 26-03-2014 579.3 566.6 6589.75 6601.4 -2.19% 0.18% 0.11% -2.30% -13.94%
-7 27-03-2014 566.6 560.55 6601.4 6641.75 -1.07% 0.61% 0.43% -1.50% -15.44%
-6 28-03-2014 560.55 563.2 6641.75 6695.9 0.47% 0.82% 0.58% -0.11% -15.55%
-5 31-03-2014 563.2 574.75 6695.9 6704.2 2.05% 0.12% 0.07% 1.98% -13.57%
-4 01-04-2014 574.75 572.1 6704.2 6721.05 -0.46% 0.25% 0.16% -0.62% -14.19%
-3 02-04-2014 572.1 575.25 6721.05 6752.55 0.55% 0.47% 0.32% 0.23% -13.97%
-2 03-04-2014 575.25 578.55 6752.55 6736.1 0.57% -0.24% -0.21% 0.78% -13.19%
-1 04-04-2014 578.55 571.8 6736.1 6694.35 -1.17% -0.62% -0.49% -0.68% -13.87%
0 07-04-2014 571.8 588.1 6694.35 6695.05 2.85% 0.01% -0.02% 2.87% -11.00%
1 09-04-2014 588.1 630 6695.05 6796.2 7.12% 1.51% 1.10% 6.02% -4.98%
2 10-04-2014 630 615.4 6796.2 6796.4 -2.32% 0.00% -0.02% -2.30% -7.27%
3 11-04-2014 615.4 628.15 6796.4 6776.3 2.07% -0.30% -0.24% 2.32% -4.95%
4 15-04-2014 628.15 616.4 6776.3 6733.1 -1.87% -0.64% -0.50% -1.37% -6.33%
5 16-04-2014 616.4 613.85 6733.1 6675.3 -0.41% -0.86% -0.66% 0.25% -6.08%
6 17-04-2014 613.85 625.05 6675.3 6779.4 1.82% 1.56% 1.14% 0.69% -5.39%
7 21-04-2014 625.05 621.25 6779.4 6817.65 -0.61% 0.56% 0.40% -1.00% -6.39%
8 22-04-2014 621.25 619.95 6817.65 6815.35 -0.21% -0.03% -0.05% -0.16% -6.55%
9 23-04-2014 619.95 625.6 6815.35 6840.8 0.91% 0.37% 0.25% 0.66% -5.89%
10 25-04-2014 625.6 622 6840.8 6782.75 -0.58% -0.85% -0.66% 0.08% -5.81%
11 28-04-2014 622 636.65 6782.75 6761.25 2.36% -0.32% -0.26% 2.62% -3.20%
12 29-04-2014 636.65 639.45 6761.25 6715.25 0.44% -0.68% -0.53% 0.97% -2.23%
13 30-04-2014 639.45 632.8 6715.25 6696.4 -1.04% -0.28% -0.23% -0.81% -3.03%
14 02-05-2014 632.8 629.9 6696.4 6694.8 -0.46% -0.02% -0.04% -0.42% -3.45%
15 05-05-2014 629.9 626.6 6694.8 6699.35 -0.52% 0.07% 0.03% -0.55% -4.00%
16 06-05-2014 626.6 626.1 6699.35 6715.3 -0.08% 0.24% 0.15% -0.23% -4.23%
17 07-05-2014 626.1 630.75 6715.3 6652.55 0.74% -0.93% -0.72% 1.46% -2.77%
18 08-05-2014 630.75 624.2 6652.55 6659.85 -1.04% 0.11% 0.06% -1.10% -3.87%
19 09-05-2014 624.2 624.1 6659.85 6858.8 -0.02% 2.99% 2.20% -2.22% -6.08%
20 12-05-2014 624.1 613.35 6858.8 7014.25 -1.72% 2.27% 1.66% -3.39% -9.47%
21 13-05-2014 613.35 609.1 7014.25 7108.75 -0.69% 1.35% 0.98% -1.67% -11.14%
22 14-05-2014 609.1 612.15 7108.75 7108.75 0.50% 0.00% -0.02% 0.53% -10.61%
23 15-05-2014 612.15 621.4 7108.75 7123.15 1.51% 0.20% 0.13% 1.38% -9.23%
24 16-05-2014 621.4 613.5 7123.15 7203 -1.27% 1.12% 0.81% -2.08% -11.31%
25 19-05-2014 613.5 584.25 7203 7263.55 -4.77% 0.84% 0.60% -5.37% -16.68%
26 20-05-2014 584.25 587.4 7263.55 7275.5 0.54% 0.16% 0.10% 0.44% -16.24%
27 21-05-2014 587.4 576.9 7275.5 7252.9 -1.79% -0.31% -0.26% -1.53% -17.77%
28 22-05-2014 576.9 580.1 7252.9 7276.4 0.55% 0.32% 0.22% 0.34% -17.43%
29 23-05-2014 580.1 584.3 7276.4 7367.1 0.72% 1.25% 0.90% -0.18% -17.61%
30 26-05-2014 584.3 591.1 7367.1 7359.05 1.16% -0.11% -0.11% 1.27% -16.34%

12
 2. Vedanta Analysis
Day from Vedanta NIFTY Daily return
Date
Event date Prev Close Close Prev Close Close Vedanta NIFTY

-280 22-04-2014 201.65 193.65 6817.65 6815.35 -3.97% -0.03%

-279 23-04-2014 193.65 192.55 6815.35 6840.8 -0.57% 0.37%

-278 25-04-2014 192.55 193.55 6840.8 6782.75 0.52% -0.85%

-277 28-04-2014 193.55 193.15 6782.75 6761.25 -0.21% -0.32%

till

-31 30-04-2015 207.05 209.85 8239.75 8181.5 1.35% -0.71%

Alpha 0.000547311

Beta 1.362210789

Day from Vedanta NIFTY Daily return Excepted Abnormal

Date CAR
Event date Prev Close Close Prev Close Close Vedanta NIFTY Return Return
-30 04-05-2015 209.85 212.4 8181.5 8331.95 1.22% 1.84% 2.45% -1.24% -1.24%
-29 05-05-2015 212.4 226.7 8331.95 8324.8 6.73% -0.09% -0.17% 6.90% 5.67%
-28 06-05-2015 226.7 220.15 8324.8 8097 -2.89% -2.74% -3.78% 0.89% 6.56%
-27 07-05-2015 220.15 218.15 8097 8057.3 -0.91% -0.49% -0.72% -0.19% 6.38%
-26 08-05-2015 218.15 217.95 8057.3 8191.5 -0.09% 1.67% 2.21% -2.31% 4.07%
-25 11-05-2015 217.95 230.3 8191.5 8325.25 5.67% 1.63% 2.17% 3.50% 7.57%
-24 12-05-2015 230.3 218.25 8325.25 8126.95 -5.23% -2.38% -3.30% -1.93% 5.63%
-23 13-05-2015 218.25 218.15 8126.95 8235.45 -0.05% 1.34% 1.76% -1.81% 3.82%
-22 14-05-2015 218.15 214.75 8235.45 8224.2 -1.56% -0.14% -0.24% -1.32% 2.51%
-21 15-05-2015 214.75 210.35 8224.2 8262.35 -2.05% 0.46% 0.58% -2.63% -0.12%
-20 18-05-2015 210.35 211.15 8262.35 8373.65 0.38% 1.35% 1.78% -1.40% -1.52%
-19 19-05-2015 211.15 215.05 8373.65 8365.65 1.85% -0.10% -0.18% 2.03% 0.51%
-18 20-05-2015 215.05 216.05 8365.65 8423.25 0.47% 0.69% 0.88% -0.42% 0.09%
-17 21-05-2015 216.05 209 8423.25 8421 -3.26% -0.03% -0.09% -3.17% -3.08%
-16 22-05-2015 209 206.2 8421 8458.95 -1.34% 0.45% 0.56% -1.90% -4.98%
-15 25-05-2015 206.2 199.4 8458.95 8370.25 -3.30% -1.05% -1.48% -1.81% -6.79%
-14 26-05-2015 199.4 195.1 8370.25 8339.35 -2.16% -0.37% -0.56% -1.60% -8.39%
-13 27-05-2015 195.1 191.6 8339.35 8334.6 -1.79% -0.06% -0.13% -1.66% -10.05%
-12 28-05-2015 191.6 196.75 8334.6 8319 2.69% -0.19% -0.31% 3.00% -7.05%
-11 29-05-2015 196.75 196.45 8319 8433.65 -0.15% 1.38% 1.82% -1.98% -9.03%
-10 01-06-2015 196.45 197.7 8433.65 8433.4 0.64% 0.00% -0.06% 0.70% -8.33%
-9 02-06-2015 197.7 194.75 8433.4 8236.45 -1.49% -2.34% -3.24% 1.74% -6.59%
-8 03-06-2015 194.75 188.3 8236.45 8135.1 -3.31% -1.23% -1.73% -1.58% -8.17%
-7 04-06-2015 188.3 184.2 8135.1 8130.65 -2.18% -0.05% -0.13% -2.05% -10.22%
-6 05-06-2015 184.2 182.8 8130.65 8114.7 -0.76% -0.20% -0.32% -0.44% -10.66%
-5 08-06-2015 182.8 177.05 8114.7 8044.15 -3.15% -0.87% -1.24% -1.91% -12.56%
-4 09-06-2015 177.05 182.55 8044.15 8022.4 3.11% -0.27% -0.42% 3.53% -9.03%
-3 10-06-2015 182.55 185 8022.4 8124.45 1.34% 1.27% 1.68% -0.34% -9.37%
-2 11-06-2015 185 188 8124.45 7965.35 1.62% -1.96% -2.72% 4.34% -5.03%
-1 12-06-2015 188 183.8 7965.35 7982.9 -2.23% 0.22% 0.25% -2.48% -7.51%
0 15-06-2015 183.8 181.35 7982.9 8013.9 -1.33% 0.39% 0.47% -1.81% -9.31%
1 16-06-2015 181.35 178.5 8013.9 8047.3 -1.57% 0.42% 0.51% -2.08% -11.40%
2 17-06-2015 178.5 172.65 8047.3 8091.55 -3.28% 0.55% 0.69% -3.97% -15.37%

13
 3 18-06-2015 172.65 173.2 8091.55 8174.6 0.32% 1.03% 1.34% -1.02% -16.39%
4 19-06-2015 173.2 174.85 8174.6 8224.95 0.95% 0.62% 0.78% 0.17% -16.23%
5 22-06-2015 174.85 176.55 8224.95 8353.1 0.97% 1.56% 2.07% -1.10% -17.32%
6 23-06-2015 176.55 176.45 8353.1 8381.55 -0.06% 0.34% 0.41% -0.47% -17.79%
7 24-06-2015 176.45 176.1 8381.55 8360.85 -0.20% -0.25% -0.39% 0.19% -17.59%
8 25-06-2015 176.1 179.6 8360.85 8398 1.99% 0.44% 0.55% 1.44% -16.16%
9 26-06-2015 179.6 174.85 8398 8381.1 -2.64% -0.20% -0.33% -2.32% -18.47%
10 29-06-2015 174.85 172.7 8381.1 8318.4 -1.23% -0.75% -1.07% -0.16% -18.63%
11 30-06-2015 172.7 174.15 8318.4 8368.5 0.84% 0.60% 0.77% 0.07% -18.55%
12 01-07-2015 174.15 176 8368.5 8453.05 1.06% 1.01% 1.32% -0.26% -18.81%
13 02-07-2015 176 173.55 8453.05 8444.9 -1.39% -0.10% -0.19% -1.21% -20.02%
14 03-07-2015 173.55 170.55 8444.9 8484.9 -1.73% 0.47% 0.59% -2.32% -22.34%
15 06-07-2015 170.55 163.4 8484.9 8522.15 -4.19% 0.44% 0.54% -4.74% -27.07%
16 07-07-2015 163.4 158.55 8522.15 8510.8 -2.97% -0.13% -0.24% -2.73% -29.81%
17 08-07-2015 158.55 145.7 8510.8 8363.05 -8.10% -1.74% -2.42% -5.69% -35.49%
18 09-07-2015 145.7 138.9 8363.05 8328.55 -4.67% -0.41% -0.62% -4.05% -39.54%
19 10-07-2015 138.9 146.2 8328.55 8360.55 5.26% 0.38% 0.47% 4.79% -34.76%
20 13-07-2015 146.2 147.55 8360.55 8459.65 0.92% 1.19% 1.56% -0.64% -35.39%
21 14-07-2015 147.55 145.25 8459.65 8454.1 -1.56% -0.07% -0.14% -1.41% -36.81%
22 15-07-2015 145.25 145.5 8454.1 8523.8 0.17% 0.82% 1.07% -0.90% -37.70%
23 16-07-2015 145.5 143.65 8523.8 8608.05 -1.27% 0.99% 1.29% -2.56% -40.27%
24 17-07-2015 143.65 145.55 8608.05 8609.85 1.32% 0.02% -0.03% 1.35% -38.92%
25 20-07-2015 145.55 143.2 8609.85 8603.45 -1.61% -0.07% -0.16% -1.46% -40.38%
26 21-07-2015 143.2 136.35 8603.45 8529.45 -4.78% -0.86% -1.23% -3.56% -43.93%
27 22-07-2015 136.35 136.1 8529.45 8633.5 -0.18% 1.22% 1.61% -1.79% -45.72%
28 23-07-2015 136.1 135.5 8633.5 8589.8 -0.44% -0.51% -0.74% 0.30% -45.42%
29 24-07-2015 135.5 132.45 8589.8 8521.55 -2.25% -0.79% -1.14% -1.11% -46.53%
30 27-07-2015 132.45 128.5 8521.55 8361 -2.98% -1.88% -2.62% -0.36% -46.89%

3. Ultratech Cement Analysis

Day from Ultratech NIFTY Daily return
Date
Event date Prev Close Close Prev Close Close Ultratech NIFTY

-280 13-01-2015 2700.3 2818.5 8323 8299.4 4.38% -0.28%

-279 14-01-2015 2818.5 2908.85 8299.4 8277.55 3.21% -0.26%

-278 15-01-2015 2908.85 3083.05 8277.55 8494.15 5.99% 2.62%

-277 16-01-2015 3083.05 3070.1 8494.15 8513.8 -0.42% 0.23%

Till

-31 14-01-2016 2684.35 2626.8 7562.4 7536.8 -2.14% -0.34%

Alpha 0.000442178

Beta 1.120946626

Day from Ultratech NIFTY Daily return Excepted Abnormal

Date CAR
Event date Prev Close Close Prev Close Close Ultratech NIFTY Return Return
-30 15-01-2016 2626.8 2618.2 7536.8 7437.8 -0.33% -1.31% -1.43% 1.10% 1.10%
-29 18-01-2016 2618.2 2641.1 7437.8 7351 0.87% -1.17% -1.26% 2.14% 3.24%
-28 19-01-2016 2641.1 2638.7 7351 7435.1 -0.09% 1.14% 1.33% -1.42% 1.82%

14
-27 20-01-2016 2638.7 2617.65 7435.1 7309.3 -0.80% -1.69% -1.85% 1.05% 2.88%
-26 21-01-2016 2617.65 2695.05 7309.3 7276.8 2.96% -0.44% -0.45% 3.41% 6.29%
-25 22-01-2016 2695.05 2713.4 7276.8 7422.45 0.68% 2.00% 2.29% -1.61% 4.68%
-24 25-01-2016 2713.4 2750.45 7422.45 7436.15 1.37% 0.18% 0.25% 1.11% 5.79%
-23 27-01-2016 2750.45 2751.55 7436.15 7437.75 0.04% 0.02% 0.07% -0.03% 5.77%
-22 28-01-2016 2751.55 2744.7 7437.75 7424.65 -0.25% -0.18% -0.15% -0.10% 5.67%
-21 29-01-2016 2744.7 2840.1 7424.65 7563.55 3.48% 1.87% 2.14% 1.33% 7.01%
-20 01-02-2016 2840.1 2819.3 7563.55 7555.95 -0.73% -0.10% -0.07% -0.66% 6.34%
-19 02-02-2016 2819.3 2802.7 7555.95 7455.55 -0.59% -1.33% -1.45% 0.86% 7.20%
-18 03-02-2016 2802.7 2769.05 7455.55 7361.8 -1.20% -1.26% -1.37% 0.16% 7.36%
-17 04-02-2016 2769.05 2769.55 7361.8 7404 0.02% 0.57% 0.69% -0.67% 6.69%
-16 05-02-2016 2769.55 2842.75 7404 7489.1 2.64% 1.15% 1.33% 1.31% 8.00%
-15 08-02-2016 2842.75 2821.55 7489.1 7387.25 -0.75% -1.36% -1.48% 0.73% 8.74%
-14 09-02-2016 2821.55 2766.25 7387.25 7298.2 -1.96% -1.21% -1.31% -0.65% 8.09%
-13 10-02-2016 2766.25 2797.9 7298.2 7215.7 1.14% -1.13% -1.22% 2.37% 10.45%
-12 11-02-2016 2797.9 2717.9 7215.7 6976.35 -2.86% -3.32% -3.67% 0.81% 11.27%
-11 12-02-2016 2717.9 2767.75 6976.35 6980.95 1.83% 0.07% 0.12% 1.72% 12.98%
-10 15-02-2016 2767.75 2802.35 6980.95 7162.95 1.25% 2.61% 2.97% -1.72% 11.27%
-9 16-02-2016 2802.35 2787.6 7162.95 7048.25 -0.53% -1.60% -1.75% 1.22% 12.49%
-8 17-02-2016 2787.6 2776.55 7048.25 7108.45 -0.40% 0.85% 1.00% -1.40% 11.09%
-7 18-02-2016 2776.55 2795.1 7108.45 7191.75 0.67% 1.17% 1.36% -0.69% 10.40%
-6 19-02-2016 2795.1 2844.7 7191.75 7210.75 1.77% 0.26% 0.34% 1.43% 11.84%
-5 22-02-2016 2844.7 2923.1 7210.75 7234.55 2.76% 0.33% 0.41% 2.34% 14.18%
-4 23-02-2016 2923.1 2816.35 7234.55 7109.55 -3.65% -1.73% -1.89% -1.76% 12.42%
-3 24-02-2016 2816.35 2797.35 7109.55 7018.7 -0.67% -1.28% -1.39% 0.71% 13.13%
-2 25-02-2016 2797.35 2779.1 7018.7 6970.6 -0.65% -0.69% -0.72% 0.07% 13.21%
-1 26-02-2016 2779.1 2770.95 6970.6 7029.75 -0.29% 0.85% 1.00% -1.29% 11.92%
0 29-02-2016 2770.95 2768.6 7029.75 6987.05 -0.08% -0.61% -0.64% 0.55% 12.47%
1 01-03-2016 2768.6 2885.3 6987.05 7222.3 4.22% 3.37% 3.82% 0.40% 12.87%
2 02-03-2016 2885.3 2973 7222.3 7368.85 3.04% 2.03% 2.32% 0.72% 13.59%
3 03-03-2016 2973 2944.25 7368.85 7475.6 -0.97% 1.45% 1.67% -2.64% 10.95%
4 04-03-2016 2944.25 2906.9 7475.6 7485.35 -1.27% 0.13% 0.19% -1.46% 9.49%
5 08-03-2016 2906.9 2950 7485.35 7485.3 1.48% 0.00% 0.04% 1.44% 10.93%
6 09-03-2016 2950 2991.6 7485.3 7531.8 1.41% 0.62% 0.74% 0.67% 11.60%
7 10-03-2016 2991.6 2997.75 7531.8 7486.15 0.21% -0.61% -0.64% 0.84% 12.44%
8 11-03-2016 2997.75 2994.45 7486.15 7510.2 -0.11% 0.32% 0.40% -0.51% 11.93%
9 14-03-2016 2994.45 3008.3 7510.2 7538.75 0.46% 0.38% 0.47% -0.01% 11.92%
10 15-03-2016 3008.3 2989.6 7538.75 7460.6 -0.62% -1.04% -1.12% 0.50% 12.42%
11 16-03-2016 2989.6 2968.25 7460.6 7498.75 -0.71% 0.51% 0.62% -1.33% 11.08%
12 17-03-2016 2968.25 3029 7498.75 7512.55 2.05% 0.18% 0.25% 1.80% 12.88%
13 18-03-2016 3029 3110.65 7512.55 7604.35 2.70% 1.22% 1.41% 1.28% 14.16%
14 21-03-2016 3110.65 3229.5 7604.35 7704.25 3.82% 1.31% 1.52% 2.30% 16.47%
15 22-03-2016 3229.5 3210.4 7704.25 7714.9 -0.59% 0.14% 0.20% -0.79% 15.68%
16 23-03-2016 3210.4 3198.45 7714.9 7716.5 -0.37% 0.02% 0.07% -0.44% 15.24%
17 28-03-2016 3198.45 3176.95 7716.5 7615.1 -0.67% -1.31% -1.43% 0.76% 15.99%
18 29-03-2016 3176.95 3136.25 7615.1 7597 -1.28% -0.24% -0.22% -1.06% 14.93%
19 30-03-2016 3136.25 3184.1 7597 7735.2 1.53% 1.82% 2.08% -0.56% 14.38%
20 31-03-2016 3184.1 3228.75 7735.2 7738.4 1.40% 0.04% 0.09% 1.31% 15.69%
21 01-04-2016 3228.75 3203.7 7738.4 7713.05 -0.78% -0.33% -0.32% -0.45% 15.23%
22 04-04-2016 3203.7 3170.85 7713.05 7758.8 -1.03% 0.59% 0.71% -1.73% 13.50%
23 05-04-2016 3170.85 3100.4 7758.8 7603.2 -2.22% -2.01% -2.20% -0.02% 13.48%
24 06-04-2016 3100.4 3188.6 7603.2 7614.35 2.84% 0.15% 0.21% 2.64% 16.12%
25 07-04-2016 3188.6 3137.45 7614.35 7546.45 -1.60% -0.89% -0.96% -0.65% 15.47%
26 08-04-2016 3137.45 3158.85 7546.45 7555.2 0.68% 0.12% 0.17% 0.51% 15.98%
27 11-04-2016 3158.85 3152.2 7555.2 7671.4 -0.21% 1.54% 1.77% -1.98% 14.00%
28 12-04-2016 3152.2 3166.4 7671.4 7708.95 0.45% 0.49% 0.59% -0.14% 13.86%
29 13-04-2016 3166.4 3273.7 7708.95 7850.45 3.39% 1.84% 2.10% 1.29% 15.14%
30 18-04-2016 3273.7 3405.65 7850.45 7914.7 4.03% 0.82% 0.96% 3.07% 18.21%

15
 4. Ashok Leyland Analysis
Day from AshokLeyland NIFTY Daily return
Date
Event date Prev Close Close Prev Close Close AshokLeyland NIFTY

-280 24-07-2015 82.1 80.5 8589.8 8521.55 -1.95% -0.79%

-279 27-07-2015 80.5 80.9 8521.55 8361 0.50% -1.88%

-278 28-07-2015 80.9 83.3 8361 8337 2.97% -0.29%

-277 29-07-2015 83.3 84.9 8337 8375.05 1.92% 0.46%

Till

-31 28-07-2016 2684.35 2626.8 7562.4 7536.8 -2.14% -0.34%

ALPHA 0.000688815

BETA 1.125168964

Day from AshokLeyland NIFTY Daily return Excepted Abnormal

Date CAR
Event date Prev Close Close Prev Close Close AshokLeyland NIFTY Return Return
-30 15-01-2016 94.1 95.25 8666.3 8638.5 1.22% -0.32% -0.29% 1.51% 1.51%
-29 18-01-2016 95.25 91.6 8638.5 8636.55 -3.83% -0.02% 0.04% -3.88% -2.36%
-28 19-01-2016 91.6 88.15 8636.55 8622.9 -3.77% -0.16% -0.11% -3.66% -6.02%
-27 20-01-2016 88.15 85.5 8622.9 8544.85 -3.01% -0.91% -0.95% -2.06% -8.08%
-26 21-01-2016 85.5 86.3 8544.85 8551.1 0.94% 0.07% 0.15% 0.78% -7.29%
-25 22-01-2016 86.3 88.1 8551.1 8683.15 2.09% 1.54% 1.81% 0.28% -7.01%
-24 25-01-2016 88.1 89.15 8683.15 8711.35 1.19% 0.32% 0.43% 0.76% -6.25%
-23 27-01-2016 89.15 89.5 8711.35 8678.25 0.39% -0.38% -0.36% 0.75% -5.50%
-22 28-01-2016 89.5 87.95 8678.25 8575.3 -1.73% -1.19% -1.27% -0.47% -5.97%
-21 29-01-2016 87.95 87.2 8575.3 8592.15 -0.85% 0.20% 0.29% -1.14% -7.11%
-20 01-02-2016 87.2 86.65 8592.15 8672.15 -0.63% 0.93% 1.12% -1.75% -8.86%
-19 02-02-2016 86.65 86.65 8672.15 8642.55 0.00% -0.34% -0.32% 0.32% -8.54%
-18 03-02-2016 86.65 86.7 8642.55 8624.05 0.06% -0.21% -0.17% 0.23% -8.31%
-17 04-02-2016 86.7 87.55 8624.05 8673.25 0.98% 0.57% 0.71% 0.27% -8.04%
-16 05-02-2016 87.55 87 8673.25 8666.9 -0.63% -0.07% -0.01% -0.61% -8.66%
-15 08-02-2016 87 87.1 8666.9 8629.15 0.11% -0.44% -0.42% 0.54% -8.12%
-14 09-02-2016 87.1 87.85 8629.15 8632.6 0.86% 0.04% 0.11% 0.75% -7.38%
-13 10-02-2016 87.85 88.55 8632.6 8650.3 0.80% 0.21% 0.30% 0.50% -6.88%
-12 11-02-2016 88.55 86.55 8650.3 8592.2 -2.26% -0.67% -0.69% -1.57% -8.45%
-11 12-02-2016 86.55 87.7 8592.2 8572.55 1.33% -0.23% -0.19% 1.52% -6.93%
-10 15-02-2016 87.7 87.9 8572.55 8607.45 0.23% 0.41% 0.53% -0.30% -7.23%
-9 16-02-2016 87.9 88.4 8607.45 8744.35 0.57% 1.59% 1.86% -1.29% -8.52%
-8 17-02-2016 88.4 87.55 8744.35 8786.2 -0.96% 0.48% 0.61% -1.57% -10.09%
-7 18-02-2016 87.55 83.8 8786.2 8774.65 -4.28% -0.13% -0.08% -4.20% -14.29%
-6 19-02-2016 83.8 83 8774.65 8809.65 -0.95% 0.40% 0.52% -1.47% -15.77%
-5 22-02-2016 83 85.75 8809.65 8943 3.31% 1.51% 1.77% 1.54% -14.23%
-4 23-02-2016 85.75 88.5 8943 8917.95 3.21% -0.28% -0.25% 3.45% -10.77%
-3 24-02-2016 88.5 87.75 8917.95 8952.5 -0.85% 0.39% 0.50% -1.35% -12.12%
-2 25-02-2016 87.75 87.25 8952.5 8866.7 -0.57% -0.96% -1.01% 0.44% -11.69%
-1 26-02-2016 87.25 83.45 8866.7 8715.6 -4.36% -1.70% -1.85% -2.51% -14.19%
0 29-02-2016 83.45 84.4 8715.6 8726.6 1.14% 0.13% 0.21% 0.93% -13.26%
1 01-03-2016 84.4 81.6 8726.6 8742.55 -3.32% 0.18% 0.27% -3.59% -16.86%
2 02-03-2016 81.6 81.1 8742.55 8779.85 -0.61% 0.43% 0.55% -1.16% -18.02%
3 03-03-2016 81.1 84.6 8779.85 8808.4 4.32% 0.33% 0.43% 3.88% -14.14%
4 04-03-2016 84.6 84.05 8808.4 8775.9 -0.65% -0.37% -0.35% -0.30% -14.44%

16
 5 08-03-2016 84.05 82.7 8775.9 8777.15 -1.61% 0.01% 0.08% -1.69% -16.13%
6 09-03-2016 82.7 83.95 8777.15 8867.45 1.51% 1.03% 1.23% 0.29% -15.85%
7 10-03-2016 83.95 82.65 8867.45 8831.55 -1.55% -0.40% -0.39% -1.16% -17.01%
8 11-03-2016 82.65 81.8 8831.55 8723.05 -1.03% -1.23% -1.31% 0.29% -16.72%
9 14-03-2016 81.8 81.45 8723.05 8706.4 -0.43% -0.19% -0.15% -0.28% -17.01%
10 15-03-2016 81.45 81.85 8706.4 8745.15 0.49% 0.45% 0.57% -0.08% -17.08%
11 16-03-2016 81.85 76.45 8745.15 8591.25 -6.60% -1.76% -1.91% -4.69% -21.77%
12 17-03-2016 76.45 79.6 8591.25 8611.15 4.12% 0.23% 0.33% 3.79% -17.98%
13 18-03-2016 79.6 83.1 8611.15 8738.1 4.40% 1.47% 1.73% 2.67% -15.31%
14 21-03-2016 83.1 81.35 8738.1 8769.15 -2.11% 0.36% 0.47% -2.57% -17.89%
15 22-03-2016 81.35 81.65 8769.15 8743.95 0.37% -0.29% -0.25% 0.62% -17.26%
16 23-03-2016 81.65 80.8 8743.95 8709.55 -1.04% -0.39% -0.37% -0.67% -17.93%
17 28-03-2016 80.8 81.2 8709.55 8697.6 0.50% -0.14% -0.09% 0.58% -17.35%
18 29-03-2016 81.2 80.75 8697.6 8708.8 -0.55% 0.13% 0.21% -0.77% -18.12%
19 30-03-2016 80.75 79.4 8708.8 8573.35 -1.67% -1.56% -1.68% 0.01% -18.11%
20 31-03-2016 79.4 80.65 8573.35 8583.4 1.57% 0.12% 0.20% 1.37% -16.73%
21 01-04-2016 80.65 81.6 8583.4 8520.4 1.18% -0.73% -0.76% 1.93% -14.80%
22 04-04-2016 81.6 83.85 8520.4 8677.9 2.76% 1.85% 2.15% 0.61% -14.19%
23 05-04-2016 83.85 84.35 8677.9 8659.1 0.60% -0.22% -0.17% 0.77% -13.42%
24 06-04-2016 84.35 85.7 8659.1 8699.4 1.60% 0.47% 0.59% 1.01% -12.41%
25 07-04-2016 85.7 87.05 8699.4 8693.05 1.58% -0.07% -0.01% 1.59% -10.82%
26 08-04-2016 87.05 88.05 8693.05 8708.95 1.15% 0.18% 0.27% 0.87% -9.95%
27 11-04-2016 88.05 87.65 8708.95 8691.3 -0.45% -0.20% -0.16% -0.30% -10.24%
28 12-04-2016 87.65 87.2 8691.3 8615.25 -0.51% -0.88% -0.92% 0.40% -9.84%
29 13-04-2016 87.2 84.9 8615.25 8615.25 -2.64% 0.00% 0.07% -2.71% -12.55%
30 18-04-2016 84.9 90.25 8615.25 8638 6.30% 0.26% 0.37% 5.94% -6.61%

17
FINDINGS
1) Sunpharma – Ranbaxy Labortories

Financial Impact: (Observed above 90% significance level)

i) Decrease in average Net Profit Margin from 30.92% to 18.28%

ii) Decrease in return on asset from 13.7% to 7.63%
iii) Increase in Debt to Equity ratio from 0.05 to 0.24
iv) Decrease in the average current ratio from 3.6 to 1.72

Valuation Impact:

Shareholders reacted negatively to the Sunpharma and Ranbaxy Laboratories deal, causing Cumulative
Abnormal Return (CAR) of 30 days prior and 30 post announcement date to be equal to -16.34%.

2) Vedanta - Cairn India Ltd

Financial Impact:

i) Decrease in Debt to Equity ratio from 1.26 to 0.87

ii) Increase in Asset Turnover ratio from 35.97 to 47.08
iii) Decrease in Current ratio from 1.25 to 0.84
iv) Decrease in Enterprise Value to EBITDA ratio from 6.28 to 4.65

Valuation Impact:

Shareholders reacted negatively to the Vedanta and Cairn India deal, causing Cumulative Abnormal Return
(CAR) of 30 days prior and 30 post announcement date to be -46.89%.

3) Ultratech Cement – Jaypee Associate

Financial Impact:

i) Increase in Debt to Equity ratio from 0.325 to 0.745

ii) Decrease in Asset turnover ratio from 61.7 to 53.88

Valuation Impact:

There was a positive impact on the share price. The cumulative abnormal return for the event window was
equal to 18.21%.

4) Ashok Leyland - Hinduja Foundries

Financial Impact:

No significant change in financials observed.

Valuation Impact:

Cumulative Abnormal Return for the event period was equal to -6.61%.

18
CONCLUSION

1. As findings showed there was significant difference in the financials of acquiring firm, so we fail to reject
the first null hypothesis. Thus, most often, we can observe significant change in the financial
performance of the acquiring companies due to M&A deal.
2. We fail to establish positive or negative impact on financials of acquiring company caused due to M&A
action.
3. As in all four acquiring companies had significant negative impact on their stock performance, we fail to
reject the second null hypothesis. Thus, we can say that majority of times; M&A deal have significant
impact on the valuations of the acquiring company.
4. Three of four companies had negative impact on their stock prices. As sample size used was low, can
also say generally acquiring company’s valuations are negatively impacted by M&A deals in short
term.

19
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