• Masoomi Thakar
• Parvathy V.K.

Mergers and acquisitions are primarily carried out to expand the organization or its operations, increase profits, prevent the company from facing losses. The impact of mergers and acquisitions on stock price performance may be positive or negative. The study aims at identifying a difference in the stock price behavior and liquidity as well as trends of selected acquiring companies of Indian banking sector pre and post announcement of Mergers and Acquisitions. The mergers considered in the study are of the last 10 years including private sector banks and public sector banks. The study is conducted as an event study analysis using CAPM. The analysis is done using IBM SPSS software to conduct test of descriptive statistics, Paired Sample t-test, Correlation test. The research findings depict that there was no significant impact of the announcement in the selected time period. There was no significant correlation or difference between the pre and post period of each merger announcement in the 100 days time window, however, there is a correlation in the shorter time windows of 2 days and 10 days. Similarly, the difference gradually increases as the time window decreases where one case even witnesses a significant difference in the 2 days time window. The analysis of the duration of impact of the announcement show that there is an extremely short term impact of the announcement on the stock price behaviour. The research findings suggest that the announcement of mergers cause a statistically significant change in the liquidity of the acquiring company, where half the cases show a decrease or an increase in liquidity. All the mergers selected occur in different time periods, but the returns of the acquiring companies follow a few similar trends after the announcement of merger as mentioned above.

Merger and Acquisition announcement, event study, stock price behaviour, trends, difference, impact

"STOCK PRICE BEHAVIOR OF INDIAN BANKING SECTOR PRE AND POST ANNOUNCEMENT OF MERGERS AND ACQUISITIONS", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.6, Issue 6, page no.83-97, June-2019, Available :http://www.jetir.org/papers/JETIRCK06011.pdf

"STOCK PRICE BEHAVIOR OF INDIAN BANKING SECTOR PRE AND POST ANNOUNCEMENT OF MERGERS AND ACQUISITIONS", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.6, Issue 6, page no. pp83-97, June-2019, Available at : http://www.jetir.org/papers/JETIRCK06011.pdf