M&A in the Indian Banking Sector : An Analysis of Public and Private Transactions

The growth memes in the Indian economic environment provide an advantage to banks and uniquely accrete value to M&A based transactions proving benefits to bidders unlike in Bank M&A regimes reflected in the Event study literature. This work provides deeper insight into the linkages between Bank M&A and M&A literature with Indian Banking M&A and reviews the evidence.In a study of 24 M&A transactions in Indian Banks during the period 2006-2016, we find convincing evidence for both bidder and target gains that are used to specify points of comparison in Global US and European markets. These gains reflect on the continuing advantage of M&A as a large impact strategy, foreign bank exits from India and global policy imperatives advantaging the banking superstructure. Our study shows foreign portfolio exits are significant opportunity losses for Global players and may not be justified by myopic short term responses to a new policy superstructure. The 2014 Kotak ING merger produces a 13.47% CAR in the 0 to 15 event window and 23.8% in the longer-range window till trading stops in the ING Groups' India subsidiary.Large Bank mergers produce large Bidder gains that allow a renewed confidence in the merger and acquisitions strategy and deflect from unfortunate advances in theoretical analysis based in earlier analyses reflecting on event studies as a tool and on the effectiveness of M&A strategies for these acquirers based on negative gains in the Event study literature. (Does not include OLS Decomposition of Abnormal Returns)