RIL AND RPL MERGER CASE STUDY

On the basis of analytical study of sample case completed, the following conclusions have been drawn which are perfectly in the line of objectives predetermined: After merging RPL in to it in this ratio was increased to Are you a Business Owner? We believe given that RPL is yet to commence production from its new refinery the book value based swap ratio would not be an ideal indicator for fixing a swap ratio. Merger has no rating impact on RIL: The test for difference of mean was applied to check whether the difference in the pre merger and post merger was significant or not.

Merger ratio favours RPL shareholders: This will alert our moderators to take action. Mergers result in the combination of two or more companies into one, wherein merging entities lose their identities. The issue had a size of Rs 2, crore and like the one in , the offer price was Rs 60 per unit. Their results suggest that there are minor variations in terms of impact on operating performance following mergers, in different industries in India. Mergers and Acquisitions is considered as one of the strategies for growth which have emerged as a natural process of business restructuring throughout the world. This was the first step in making Jamnagar the refining hub, and over time, additional capacity was put in place.

There is a considerable difference between pre and post merger financial performance. Not all shareholders waited for the announcement. Skip to main content. It is observed on the basis sample study that the large and medium sized manufacturing entities are working under threats from economic environment which is full of problems like inadequacy of resources, outdated technology, non-systematized management pattern, faltering marketing efforts and weak financial structure etc.

On the basis of analytical study of sample case completed, the following conclusions have been drawn which are perfectly in the line of objectives predetermined: However, on book value basis, the ratio works out to be adverse for the RPL shareholders.

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The beneficiary of the merger would depend on the swap ratio.

RIL-RPL merger complete

The data of just preceding years of the year the merger took place has been considered for pre-merger study and the data for the year has been used for post merger study. At Rs1, the stock is trading at Due to the existence of strict government regulations, Indian companies were forced to go to new areas where capabilities are difficult casee develop in the short run.

Also stuxy average return on Net worth for the same company before merger casse We believe swap ratio in the range of x will be Neutral for both companies. Following the demerger of the Reliance empire in Junethe Mukesh Ambani-owned group hit the capital markets in April with a public offering from RPL.

This was to have a combination of equity shares and debentures. After merging RPL in to it in this figure was decreased to A clear communication that much expenditure was incurred at the time of merger, hence profitability of RIL declined after the merger of RPL.

studh Thus, a book value based swap ratio does not serve any purpose in this case. Secondly, the study is based purely on secondary data which are taken from the financial statements of the case through Internet only and therefore can’t be denied for any ambiguity in data used for the analysis.

ril and rpl merger case study

The following 4 major financial ratios and their means were calculated for analyzing the financial performance of the companies: This will alert our moderators to take action. We believe given that RPL is yet to commence production from its new refinery the book value based swap ratio would not be an ideal indicator for fixing a swap ratio.

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RIL-RPL merger: Who benefits?

It’ll just take a moment. In particular, mergers seem to have had a slightly positive impact on profitability of firms in the banking and finance industry, the pharmaceuticals, manufacturing sectors saw a marginal negative impact on operating performance.

It seems that the company has resorted to realizing losses. After merger this ratio was declined to 9.

ril and rpl merger case study

Choose your reason below and click on the Report button. The following hypotheses have been formulated and tested to draw the conclusions: Synergetic advantage of strategic Mergers and Mefger. Log In Sign Up.

RIL-RPL merger: Who benefits?

Below is the analysis from top brokerage houses across the country on the deal and who stands to benefit in the scheme of arrangement. He sold his holding in USD Period of Study: Click here to sign up.

The principal benefits from mergers and acquisitions can be listed as increased value anc, increase in cost efficiency and increase in market share. Your session has expired, please login again. The present study is an attempt to find out the difference in post merger financial performance compared with pre merger in terms of profitability and generating more value than the separate firms, resulting in consolidation, refocusing and restructuring of the industry with a motive of faster mechanism.