RIL AND RPL MERGER CASE STUDY

Taking into consideration these important facts, the researchers have undertaken this study. Get instant notifications from Economic Times Allow Not now You can switch off notifications anytime using browser settings. Will be displayed Will not be displayed Will be displayed. An acquisition, alternately, is aimed at gaining a controlling interest in the share capital of the acquired company. Never miss a great news story!

Being bought out often carries negative connotations, therefore, by describing the deal euphemistically as a merger, deal makers and top managers try to make the takeover more palatable. The decline might have been caused by the high costs during merger or because of writing off the losses of RPL. The response from the market was overwhelming and the issue was oversubscribed by over 50 times. After concluding the results of this study, it is found appropriate to put the following suggestions: Issn no volume 11 “Mergers and Acquisitions: Are you a Business Owner? Fill in your details:

ril and rpl merger case study

The response from the market was overwhelming and the issue was oversubscribed by over 50 times. Log In Sign Up. A firm can achieve growth both internally and externally. Help Center Find new research papers in: Due to the existence of strict government regulations, Indian companies were forced to go to new areas where capabilities are difficult to develop in the short run.

Following the demerger of the Studyy empire in Junethe Mukesh Ambani-owned group hit the capital markets in April with a public offering from RPL.

RIL-RPL merger complete

There is no considerable difference between pre and post merger financial performance. Synergetic advantage of strategic Mergers and Acquisitions.

The above Table shows the position of Reliance Industries Ltd. Though researchers have made a sutdy attempt to encompass the pre and post merger performance of the selected sample merger case, it is difficult to narrate all incidents and changes brought up due to mergers and acquisitions and therefore necessary inferences are inserted wherever required.

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History repeats with RIL-RPL merger – The Economic Times

While Mr Choksey did not recall how much he invested in that public issue, the shares that came his way are still with him. Alternatively, if RPL would have been maintained as a separate entity and had paid dividend to RIL, it would have attracted dividend distribution tax of Get instant notifications from Economic Times Allow Not now You can switch off notifications anytime using browser settings.

We believe swap ratio in the range of x will be Neutral for both companies. 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: This was to have a combination of equity shares and debentures.

The difference was that the issue in was at a premium of Rs 50 without a debenture component attached to it.

RIL-RPL merger complete

An acquisition, alternately, is aimed at gaining a controlling interest in the share capital of the acquired company. After merging RPL in to it in this ratio was increased to However, an exchange of shares takes place between the entities involved in such process.

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Get instant notifications from Economic Times Allow Not now. RPL has incurred huge capex towards commissioning its refinery and is likely to generate positive free cash flow FCF going forward.

ril and rpl merger case study

Thus, the proposed merger would help RIL utilise this Cash flows in its other business verticals in a anx manner. 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. The principal benefits from mergers and acquisitions can be listed as increased value generation, increase studh cost efficiency and increase in market share.

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Though the theoretical assumption says that mergers improve the overall performance of the company due to increased market power, Tambi uses his paper to evaluate the same in the scenario of Indian economy.

After merging RPL in to it in this figure was decreased to USD Period of Study: Enter the email address you signed up with and we’ll email you a reset link. Below is the analysis from top brokerage houses across the country on the deal and who stands to benefit in the scheme of arrangement. Mergers result in the combination of two or more companies into one, wherein merging entities lose their identities.

ril and rpl merger case study

This will alert our moderators to take action. However, on book value basis, the ratio works out to be adverse for the RPL shareholders. To see your saved stories, click on link hightlighted in bold.

It seems that the company has resorted to realizing losses.