CHAPTER - I

INTRODUCTION

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INTRODUCTION

We have been learning about the companies coming together to from another
company and companies taking over the existing companies to expand their business.
With recession taking toll of many Indian businesses and the feeling of insecurity
surging over our businessmen, it is not surprising when we hear about the immense
numbers of corporate restructurings taking place, especially in the last couple of
years. Several companies have been taken over and several have undergone internal
restructuring, whereas certain companies in the same field of business have found it
beneficial to merge together into one company. In this context, it would be essential
for us to understand what corporate restructuring and mergers and acquisitions are all
about.

All our daily newspapers are filled with cases of mergers, acquisitions, spin-
offs, tender offers, & other forms of corporate restructuring. Thus important issues
both for business decision and public policy formulation have been raised. No firm is
regarded safe from a takeover possibility. On the more positive side Mergers &
Acquisition’s may be critical for the healthy expansion and growth of the firm.
Successful entry into new product and geographical markets may require Mergers &
Acquisition’s at some stage in the firm's development. Successful competition in
international markets may depend on capabilities obtained in a timely and efficient
fashion through Mergers & Acquisition's. Many have argued that mergers increase
value and efficiency and move resources to their highest and best uses, thereby
increasing shareholder value. .

To opt for a merger or not is a complex affair, especially in terms of the

technicalities involved. We have discussed almost all factors that the management
may have to look into before going for merger. Decision has to be taken after having
discussed the pros & cons of the proposed merger & the impact of the same on the
business, administrative costs benefits, addition to shareholders' value, tax
implications including stamp duty and last but not the least also on the employees of
the Transferor or Transferee Company.

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NEED FOR THE STUDY:
The Mergers & Acquisitions in India has really taken off in. Business environment is
dynamic, many elements in the event are changing because of changes in the
economic, social, cultural, government and legal factors .Organizations are frequently
restructuring their corporate policies to sustain the changed competitions. In this light
mergers & acquisitions are one of the corporate restructuring strategies that
organizations can adopt.

OBJECTIVES OF THE STUDY

 To study the process involved in Mergers.

 To study the advantages and disadvantages of mergers.

 To study the performance of companies after and before merger.

 To suggest for the better performance.

1.4. RESEARCH METHODOLOGY:

Scope of the Study:

The study is an analysis of merger with respect to RPL and RIL. The Study is only
made a humble attempt of evaluation of merger of RIL.
Sources of Information:
 The data collected will be mainly secondary in nature and the
sources were website and text books. Secondary Data was
collected from
 RPL & RIL and
 Tata & Corus
Financial Statements for the Financial Year 2009-10.

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1.5. STRUCTURE OF THE STUDY:
Chapter I : Introduction
Chapter II : Review of the Literature – Mergers
Chapter III : Company Profile
Chapter IV : Data Analysis and Interpretations
Chapter V : Summary and Conclusions.

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 CHAPTER II

REVIEW OF LITERATURE

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MERGER:

Merger is defined as combination of two or more companies into a single

company where one survives and the others lose their corporate existence. The
survivor acquires all the assets as well as liabilities of the merged company or
companies. Generally, the surviving company is the buyer, which retains its identity,
and the extinguished company is the seller.

Merger is also defined as amalgamation. Merger is the fusion of two or more

existing companies. All assets, liabilities and the stock of one company stand
transferred to Transferee Company in consideration of payment in the form of:

 Equity shares in the transferee company,

 Debentures in the transferee company,
 Cash, or
 A mix of the above modes.

ACQUISITION:

Acquisition in general sense is acquiring the ownership in the property. In the

context of business combinations, an acquisition is the purchase by one company of a
controlling interest in the share capital of another existing company.

Methods of Acquisition:

An acquisition may be affected by

(a) agreement with the persons holding majority interest in the company
management like members of the board or major shareholders commanding
majority of voting power;
(b) purchase of shares in open market;
(c) to make takeover offer to the general body of shareholders;
(d) purchase of new shares by private treaty;
(e) Acquisition of share capital through the following forms of considerations viz.
means of cash, issuance of loan capital, or insurance of share capital.

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Takeover:

A ‘takeover’ is acquisition and both the terms are used interchangeably. Takeover
differs from merger in approach to business combinations i.e. the process of takeover,
transaction involved in takeover, determination of share exchange or cash price and
the fulfillment of goals of combination all are different in takeovers than in mergers.
For example, process of takeover is unilateral and the offeror company decides about
the maximum price. Time taken in completion of transaction is less in takeover than
in mergers, top management of the offeree company being more co-operative.

De-merger or corporate splits or division:

De-merger or split or divisions of a company are the synonymous terms

signifying a movement in the company.

What will it take to succeed?

Funds are an obvious requirement for would-be buyers. Raising them may not
be a problem for multinationals able to tap resources at home, but for local
companies, finance is likely to be the single biggest obstacle to an acquisition.
Financial institution in some Asian markets are banned from leading for takeovers,
and debt markets are small and illiquid, deterring investors who fear that they might
not be able to sell their holdings at a later date. The credit squeezes and the depressed
state of many Asian equity markets have only made an already difficult situation
worse. Funds apart, a successful Mergers & Acquisition growth strategy must be
supported by three capabilities: deep local networks, the abilities to manage
uncertainty, and the skill to distinguish worthwhile targets. Companies that rush in
without them are likely to be stumble.

Assess target quality:

To say that a company should be worth the price a buyer pays is to state the
obvious. But assessing companies in Asia can be fraught with problems, and several
deals have gone badly wrong because buyers failed to dig deeply enough.

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 The attraction of knockdown price tag may tempt companies to skip crucial
checks. Concealed high debt levels and deferred contingent liabilities have resulted in
large deals destroying value. But in other cases, where buyers have undertaken
detailed due diligence, they have been able to negotiate prices as low as half of the
initial figure.

Due diligence can be difficult because disclosure practices are poor and
companies often lack the information buyer need. Moreover, most Asian
conglomerates still do not present consolidated financial statements, leaving the
possibilities that the sales and the profit figures might be bloated by transactions
between affiliated companies. The financial records that are available are often
unreliable, with different projections made by different departments within the same
company, and different projections made for different audiences. Banks and investors,
naturally, are likely to be shown optimistic forecasts.

Purpose of Mergers and Acquisition

The purpose for an offer or company for acquiring another company shall be
reflected in the corporate objectives. It has to decide the specific objectives to be
achieved through acquisition. The basic purpose of merger or business combination is
to achieve faster growth of the corporate business. Faster growth may be had through
product improvement and competitive position.

Other possible purposes for acquisition are short listed below: -

(1)Procurement of supplies:

1. to safeguard the source of supplies of raw materials or intermediary product;

2. to obtain economies of purchase in the form of discount, savings in
transportation costs, overhead costs in buying department, etc.;
3. to share the benefits of suppliers economies by standardizing the materials.

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(2)Revamping production facilities:

1. to achieve economies of scale by amalgamating production facilities

through more intensive utilization of plant and resources;
2. to standardize product specifications, improvement of quality of
product, expanding
3. market and aiming at consumers satisfaction through strengthening
after sale
4. services;
5. to obtain improved production technology and know-how from the
offeree company
6. to reduce cost, improve quality and produce competitive products to
retain and
7. improve market share.

(3) Market expansion and strategy:

1. to eliminate competition and protect existing market;

2. to obtain a new market outlets in possession of the offeree;
3. to obtain new product for diversification or substitution of existing products
and to enhance the product range;
4. strengthening retain outlets and sale the goods to rationalize distribution;
5. to reduce advertising cost and improve public image of the offeree company;
6. strategic control of patents and copyrights.

(4) Financial strength:

1. to improve liquidity and have direct access to cash resource;

2. to dispose of surplus and outdated assets for cash out of combined
enterprise;
3. to enhance gearing capacity, borrow on better strength and the greater
assets backing;
4. to avail tax benefits;
5. to improve EPS (Earning Per Share).

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(5) General gains:

1. to improve its own image and attract superior managerial talents to manage its
affairs;
2. to offer better satisfaction to consumers or users of the product.

(6) Own developmental plans:

The purpose of acquisition is backed by the offeror company’s own

developmental plans.
A company thinks in terms of acquiring the other company only when it has
arrived at its own development plan to expand its operation having examined
its own internal strength where it might not have any problem of taxation,
accounting, valuation, etc. but might feel resource constraints with limitations
of funds and lack of skill managerial personnel’s. It has to aim at suitable
combination where it could have opportunities to supplement its funds by
issuance of securities, secure additional financial facilities, eliminate
competition and strengthen its market position.

(7) Strategic purpose:

The Acquirer Company view the merger to achieve strategic objectives

through alternative type of combinations which may be horizontal, vertical,
product expansion, market extensional or other specified unrelated objectives
depending upon the corporate strategies. Thus, various types of combinations
distinct with each other in nature are adopted to pursue this objective like
vertical or horizontal combination.

(8) Corporate friendliness:

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 Although it is rare but it is true that business houses exhibit degrees of
cooperative spirit despite competitiveness in providing rescues to each other
from hostile takeovers and cultivate situations of collaborations

sharing goodwill of each other to achieve performance heights through

business combinations. The combining corporates aim at circular
combinations by pursuing this objective.

(9) Desired level of integration:

Mergers and acquisition are pursued to obtain the desired level of integration
between the two combining business houses. Such integration could be
operational or financial. This gives birth to conglomerate combinations. The
purpose and the requirements of the offeror company go a long way in
selecting a suitable partner for merger or acquisition in business combinations.

Types Of Mergers

Merger or acquisition depends upon the purpose of the offeror company it

wants to achieve. Based on the offerors’ objectives profile, combinations could be
vertical, horizontal, circular and conglomeratic as precisely described below with
reference to the purpose in view of the offeror company.

(A) Vertical combination:

A company would like to takeover another company or seek its merger with that
company to expand espousing backward integration to assimilate the resources of
supply and forward integration towards market outlets. The acquiring company
through merger of another unit attempts on reduction of inventories of raw
material and finished goods, implements its production plans as per the objectives
and economizes on working capital investments. In other words, in vertical
combinations, the merging undertaking would be either a supplier or a buyer
using its product as intermediary material for final production.

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 The following main benefits accrue from the vertical combination to the acquirer
company i.e.
(1) it gains a strong position because of imperfect market of the intermediary
products, scarcity of resources and purchased products;
(2) has control over products specifications.

(B) Horizontal combination:

It is a merger of two competing firms which are at the same stage of industrial
process. The acquiring firm belongs to the same industry as the target company.
The mail purpose of such mergers is to obtain economies of scale in production
by eliminating duplication of facilities and the operations and broadening the
product line, reduction in investment in working capital, elimination in
competition concentration in product, reduction in advertising costs, increase in
market segments and exercise better control on market.

(C) Circular combination:

Companies producing distinct products seek amalgamation to share common

distribution and research facilities to obtain economies by elimination of cost on
duplication and promoting market enlargement. The acquiring company obtains
benefits in the form of economies of resource sharing and diversification.

(D) Conglomerate combination:

It is amalgamation of two companies engaged in unrelated industries like DCM

and Modi Industries. The basic purpose of such amalgamations remains utilization
of financial resources and enlarges debt capacity through re-organizing their
financial structure so as to service the shareholders by increased leveraging and
EPS, lowering average cost of capital and thereby raising present worth of the
outstanding shares. Merger enhances the overall stability of the acquirer company

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and creates balance in the company’s total portfolio of diverse products and
production processes.

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Advantages Of Mergers And Takeovers

Mergers and takeovers are permanent form of combinations which vest in

management complete control and provide centralized administration which are
not available in combinations of holding company and its partly owned
subsidiary. Shareholders in the selling company gain from the merger and
takeovers as the premium offered to induce acceptance of the merger or takeover
offers much more price than the book value of shares. Shareholders in the buying
company gain in the long run with the growth of the company not only due to
synergy but also due to “boots trapping earnings”.

Motivations For Mergers And Acquisitions

Mergers and acquisitions are caused with the support of shareholders,

manager’s ad promoters of the combing companies. The factors, which motivate
the shareholders and managers to lend support to these combinations and the
resultant consequences they have to bear, are briefly noted below based on the
research work by various scholars globally.

(1) From the standpoint of shareholders

Investment made by shareholders in the companies subject to merger
should enhance in value. The sale of shares from one company’s shareholders to
another and holding investment in shares should give rise to greater values i.e. the
opportunity gains in alternative investments. Shareholders may gain from merger
in different ways viz. from the gains and achievements of the company i.e.
through
(a) realization of monopoly profits;
(b) economies of scales;
(c) diversification of product line;
(d) acquisition of human assets and other resources not available otherwise;
(e) better investment opportunity in combinations.

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(2) From the standpoint of managers

Managers are concerned with improving operations of the company,

managing the affairs of the company effectively for all round gains and growth of
the company which will provide them better deals in raising their status, perks and
fringe benefits. Mergers where all these things are the guaranteed outcome get
support from the managers. At the same time, where managers have fear of
displacement at the hands of new management in amalgamated company and also
resultant depreciation from the merger then support from them becomes difficult.

(3) Promoter’s gains

Mergers do offer to company promoters the advantage of increasing the size of their
company and the financial structure and strength. They can convert a closely held
and private limited company into a public company without contributing much
wealth and without losing control.

(4) Benefits to general public

Impact of mergers on general public could be viewed as aspect of benefits

and costs to:
(a) Consumer of the product or services;
(b) Workers of the companies under combination;
(c) General public affected in general having not been user or consumer
or the worker in the companies under merger plan.

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(a) Consumers

The economic gains realized from mergers are passed on to consumers

in the form of lower prices and better quality of the product which
directly raise their standard of living and quality of life. The balance of
benefits in favour of consumers will depend upon the fact whether or
not the mergers increase or decrease competitive economic and
productive activity which directly affects the degree of welfare of the
consumers through changes in price level, quality of products, after
sales service, etc.

(b) Workers community

The merger or acquisition of a company by a conglomerate or other

acquiring company may have the effect on both the sides of increasing
the welfare in the form of purchasing power and other miseries of life.
Two sides of the impact as discussed by the researchers and
academicians are: firstly, mergers with cash payment to shareholders
provide opportunities for them to invest this money in other companies
which will generate further employment and growth to uplift of the
economy in general. Secondly, any restrictions placed on such mergers
will decrease the growth and investment activity with corresponding
decrease in employment. Both workers and communities will suffer on
lessening job opportunities, preventing the distribution of benefits
resulting from diversification of production activity.

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(c) General public

Mergers result into centralized concentration of power. Economic

power is to be understood as the ability to control prices and industries
output as monopolists. Such monopolists affect social and political
environment to tilt everything in their favour to maintain their power
ad expand their business empire. These advances result into economic
exploitation. But in a free economy a monopolist does not stay for a
longer period as other companies enter into the field to reap the
benefits of higher prices set in by the monopolist. This enforces
competition in the market as consumers are free to substitute the
alternative products. Therefore, it is difficult to generalize that mergers
affect the welfare of general public adversely or favorably. Every
merger of two or more companies has to be viewed from different
angles in the business practices which protects the interest of the
shareholders in the merging company and also serves the national
purpose to add to the welfare of the employees, consumers and does
not create hindrance in administration of the Government polices.

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Benefits:

Benefits of Mergers and Acquisitions are the main reasons for which the
companies enter into these deals. Mergers and Acquisitions may generate tax gains,
can increase revenue and can reduce the cost of capital. The main benefits of Mergers
and Acquisitions are the following:

 Greater Value Generation - Mergers and acquisitions often lead to an

increased value generation for the company. It is expected that the
shareholder value of a firm after mergers or acquisitions would be
greater than the sum of the shareholder values of the parent
companies. Mergers and acquisitions generally succeed in generating cost
efficiency through the implementation of economies of scale.
 M&A also leads to tax gains and can even lead to a revenue enhancement
through market share gain. Companies go for Mergers and Acquisition from
the idea that, the joint company will be able to generate more value than the
separate firms. When a company buys out another, it expects that the newly
generated shareholder value will be higher than the value of the sum of the
shares of the two separate companies.

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  Mergers and Acquisitions can prove to be really beneficial to the companies
when they are weathering through the tough times. If the company which
is suffering from various problems in the market and is not able to
overcome the difficulties, it can go for an acquisition deal. If a company,
which has a strong market presence, buys out the weak firm, then a more
competitive and cost efficient company can be generated. Here, the target
company benefits as it gets out of the difficult situation and after being
acquired by the large firm, the joint company accumulates larger market
share. This is because of these benefits that the small and less powerful
firms agree to be acquired by the largefirms.

 Gaining Cost Efficiency - When two companies come together by merger

or acquisition, the joint company benefits in terms ofcost efficiency. A
merger or acquisition is able to create economies of scale which in turn
generates cost efficiency. As the two firms form a new and bigger
company, the production is done on a much larger scale and when the
output production increases, there are strong chances that the cost of
production per unit of output gets reduced. An increase in cost efficiency
is affected through the procedure of mergers and acquisitions. This is
because mergers and acquisitions lead to economies of scale. This in turn
promotes cost efficiency. As the parent firms amalgamate to form a bigger
new firm the scale of operations of the new firm increases. As output
production rises there are chances that the cost per unit of production
will come down

Mergers and Acquisitions are also beneficial :

 When a firm wants to enter a new market

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  When a firm wants to introduce new products through
research and development
 When a forms wants achieve administrative benefits
 To increased market share
 To lower cost of operation and/or production
 To gain higher competitiveness
 For industry know how and positioning
 For Financial leveraging
 To improve profitability and EPS

Consideration of Merger and Takeover

Mergers and takeovers are two different approaches to business combinations.
Mergers are pursued under the Companies Act, 1956 vide sections 391/394 thereof or
may be envisaged under the provisions of Income-tax Act, 1961 or arranged through
BIFR under the Sick Industrial Companies Act, 1985 whereas, takeovers fall solely
under the regulatory framework of the SEBI Regulations, 1997.

Minority shareholders rights

SEBI regulations do not provide insight in the event of minority shareholders

not agreeing to the takeover offer. However section 395 of the Companies Act, 1956
provides for the acquisition of shares of the shareholders. According to section 395 of
the Companies Act, if the offerer has acquired at least 90% in value of those shares
may give notice to the non-accepting shareholders of the intention of buying their
shares. The 90% acceptance level shall not include the share held by the offerer or it’s
associates. The procedure laid down in this section is briefly noted below.

1. In order to buy the shares of non-accepting shareholders the offerer must have
reached the 90% acceptance level within 4 months of the date of the offer, and
notice must have been served on those shareholders within 2 months of
reaching the 90% level.

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2. The notice to the non-accepting shareholders must be in a prescribed manner.
A copy of a notice and a statutory declaration by the offerer (or, if the offerer
is a company, by a director) in the prescribed form confirming that the
conditions for giving the notice have been satisfied must be sent to the target.

3. Once the notice has been given, the offerer is entitled and bound to acquire the
outstanding shares on the terms of the offer.

4. If the terms of the offer give the shareholders a choice of consideration, the
notice must give particulars of options available and inform the shareholders
that he has six weeks from the date of the notice to indicate his choice of
consideration in writing.

5. At the end of the six weeks from the date of the notice to the non-accepting
shareholders the offerer must immediately send a copy of notice to the target
and pay or transfer to the target the consideration for all the shares to which
the notice relates. Stock transfer forms executed on behalf of the non-
accepting shareholders by a person appointed by the offerer must also be sent.
Once the company has received stock transfer forms it must register the
offerer as the holder of the shares.

6. The consideration money, which is received by the target, should be held on

trust for the person entitled to shares in respect of which the sum was
received.

7. Alternatively, if the offerer does not wish to buy the non-accepting

shareholder’s shares, it must still within one month of company reaching the
90% acceptance level give such shareholders notice in the prescribed manner
of the rights that are exercisable by them to require the offerer to acquire their
shares. The notice must state that the offer is still open for acceptance and
specify a date after which the right may not be exercised, which may not be
less than 3 months from the end of the time within which the offer can be
accepted. If the offerer fails to send such notice it (and it’s officers who are in
default) are liable to a fine unless it or they took all reasonable steps to secure
compliance.

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 8. If the shareholder exercises his rights to require the offerer to purchase his
shares the offerer is entitled and bound to do so on the terms of the offer or on
such other terms as may be agreed. If a choice of consideration was originally
offered, the shareholder may indicate his choice when requiring the offerer to
acquire his shares. The notice given to shareholder will specify the choice of
consideration and which consideration should apply in default of an election.
9. On application made by an happy shareholder within six weeks from the date
on which the original notice was given, the court may make an order
preventing the offerer from acquiring the shares or an order specifying terms
of acquisition differing from those of the offer or make an order setting out the
terms on which the shares must be acquired.

In certain circumstances, where the takeover offer has not been accepted by
the required 90% in value of the share to which offer relates the court may, on
application of the offerer, make an order authorizing it to give notice under the
Companies Act, 1985, section 429. It will do this if it is satisfied that:

a. the offerer has after reasonable enquiry been unable to trace one or more
shareholders to whom the offer relates;
b. the shares which the offerer has acquired or contracted to acquire by virtue of
acceptance of the offerer, together with the shares held by untraceable
shareholders, amount to not less than 90% in value of the shares subject to the
offer; and
c. the consideration offered is fair and reasonable.

The court will not make such an order unless it considers that it is just and
equitable to do so, having regard, in particular, to the number of shareholder who has
been traced who did accept the offer.

Alternative Modes Of Acquisition

The terms used in business combinations carry generally synonymous

connotations and can be used interchangeably. All the different terms carry one

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single meaning of “merger” but each term cannot be given equal treatment in the
discussion because law has created a dividing line between ‘take-over’ and
acquisitions by way of merger, amalgamation or reconstruction. Particularly the
takeover Regulations for substantial acquisition of shares and takeovers known as
SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 vide
section 3 excludes any attempt of merger done by way of any one or more of the
following modes:

(a) by allotment in pursuant of an application made by the shareholders for

right issue and under a public issue;

(b) preferential allotment made in pursuance of a resolution passed under

section 81(1A) of the Companies Act, 1956;

(c) allotment to the underwriters pursuant to underwriters agreements;

(d) inter-se-transfer of shares amongst group, companies, relatives, Indian

promoters and Foreign collaborators who are shareholders/promoters;

(e) acquisition of shares in the ordinary course of business, by registered stock

brokers, public financial institutions and banks on own account or as
pledges;

(f) acquisition of shares by way of transmission on succession or inheritance;

(g) acquisition of shares by government companies and statutory corporations;

(h) transfer of shares from state level financial institutions to co-promoters in

pursuance to agreements between them;

(i) acquisition of shares in pursuance to rehabilitation schemes under Sick

Industrial Companies (Special Provisions) Act, 1985 or schemes of

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 arrangements, mergers, amalgamation, De-merger, etc. under the
Companies Act, 1956 or any other law or regulation, Indian or Foreign;

(j) acquisition of shares of company whose shares are not listed on any stock
exchange. However, this exemption in not available if the said acquisition
results into control of a listed company;

(k) such other cases as may be exempted from the applicability of Chapter III
of SEBI regulations by SEBI.

The basic logic behind substantial disclosure of takeover of a company

through acquisition of shares is that the common investors and shareholders
should be made aware of the larger financial stake in the company of the person
who is acquiring such company’s shares. The main objective of these Regulations
is to provide greater transparency in the acquisition of shares and the takeovers of
companies through a system of disclosure of information.

Escrow account

To ensure that the acquirer shall pay the shareholders the agreed amount in
redemption of his promise to acquire their shares, it is a mandatory requirement to
open escrow account and deposit there in the required amount, which will serve as
security for performance of obligation.

The Escrow amount shall be calculated as per the manner laid down in regulation
28(2). Accordingly:
For offers which are subject to a minimum level of acceptance, and the
acquirer does want to acquire a minimum of 20%, then 50% of the consideration
payable under the public offer in cash shall be deposited in the Escrow account.

Payment of consideration

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 Consideration may be payable in cash or by exchange of securities. Where it
is payable in cash the acquirer is required to pay the amount of consideration within
21 days from the date of closure of the offer. For this purpose he is required to open
special account with the bankers to an issue (registered with SEBI) and deposit
therein 90% of the amount lying in the Escrow Account, if any. He should make the
entire amount due and payable to shareholders as consideration. He can transfer the
funds from Escrow account for such payment. Where the consideration is payable in
exchange of securities, the acquirer shall ensure that securities are actually issued and
dispatched to shareholders in terms of regulation 29 of SEBI Takeover Regulations.

Procedure for Takeover and Acquisition

Public Announcement:

To make a public announcement an acquirer shall follow the following procedure:

1. Appointment of merchant banker:

The acquirer shall appoint a merchant banker registered as category – I with SEBI
to advise him on the acquisition and to make a public announcement of offer on
his behalf.

2. Use of media for announcement:

Public announcement shall be made at least in one national English daily one
Hindi daily and one regional language daily newspaper of that place where the shares
of that company are listed and traded.

3. Timings of announcement:

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 Public announcement should be made within four days of finalization of
negotiations or entering into any agreement or memorandum of understanding to
acquire the shares or the voting rights.

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4. Contents of announcement:

Public announcement of offer is mandatory as required under the SEBI

Regulations. Therefore, it is required that it should be prepared showing therein
the following information:
(1) paid up share capital of the target company, the number of fully
paid up and partially paid up shares.

(2) Total number and percentage of shares proposed to be acquired

from public subject to minimum as specified in the sub-regulation
(1) of Regulation 21 that is:
a) The public offer of minimum 20% of voting capital of the
company to the shareholders;
b) The public offer by a raider shall not be less than 10% but
more than 51% of shares of voting rights. Additional shares
can be had @ 2% of voting rights in any year.

(3) The minimum offer price for each fully paid up or partly paid up
share;

(4) Mode of payment of consideration;

(5) The identity of the acquirer and in case the acquirer is a company,
the identity of the promoters and, or the persons having control
over such company and the group, if any, to which the company
belong;

(6) The existing holding, if any, of the acquirer in the shares of the
target company, including holding of persons acting in concert
with him;

(7) Salient features of the agreement, if any, such as the date, the
name of the seller, the price at which the shares are being
acquired, the manner of payment of the consideration and the

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 number and percentage of shares in respect of which the acquirer
has entered into the agreement to acquirer the shares or the
consideration, monetary or otherwise, for the acquisition of
control over the target company, as the case may be;

(8) The highest and the average paid by the acquirer or persons acting
in concert with him for acquisition, if any, of shares of the target
company made by him during the twelve month period prior to the
date of the public announcement;

(9) Objects and purpose of the acquisition of the shares and the future
plans of the acquirer for the target company, including disclosers
whether the acquirer proposes to dispose of or otherwise
encumber any assets of the target company:
Provided that where the future plans are set out, the public
announcement shall also set out how the acquirers propose to
implement such future plans;

(10) The ‘specified date’ as mentioned in regulation 19;

(11) The date by which individual letters of offer would be posted to

each of the shareholders;

(12) The date of opening and closure of the offer and the manner in
which and the date by which the acceptance or rejection of the
offer would be communicated to the share holders;

(13) The date by which the payment of consideration would be made

for the shares in respect of which the offer has been accepted;

(14) Disclosure to the effect that firm arrangement for financial

resources required to implement the offer is already in place,
including the details regarding the sources of the funds whether

28
 domestic i.e. from banks, financial institutions, or otherwise or
foreign i.e. from Non-resident Indians or otherwise;

(15) Provision for acceptance of the offer by person who own the
shares but are not the registered holders of such shares;

(16) Statutory approvals required to obtained for the purpose of

acquiring the shares under the Companies Act, 1956, the
Monopolies and Restrictive Trade Practices Act, 1973, and/or any
other applicable laws;

(17) Approvals of banks or financial institutions required, if any;

(18) Whether the offer is subject to a minimum level of acceptances

from the shareholders; and

(19) Such other information as is essential fort the shareholders to

make an informed design in regard to the offer.

29
Why Mergers Fail?

Limitations of Mergers:

Revenue deserves more attention in mergers; indeed, a failure to focus on this

important factor may explain why so many mergers don’t pay off. Too many
companies lose their revenue momentum as they concentrate on cost synergies or fail
to focus on post merger growth in a systematic manner. Yet in the end, halted growth
hurts the market performance of a company far more than does a failure to nail costs.

a) Excessive Premium: In a competitive bidding situation, a company may

tend to pay more. Often highest bidder is one who overestimates value out of
ignorance. Though the amalgamations are the winners, he happens to be in
away the unfortunate winner. This is called winner curse hypothesis. When the
acquirer fails to achieve the synergies required compensating the price, the
Amalgamation & Acquisition fails. More you pay for a company, the harder
you will have to work to make it worthwhile for your shareholders. When the
price paid is too much, how well the deal may be executed, the deal may not
create value.

b) Size Issues: A mismatch in the size between acquirer and target has been
found to lead to poor acquisition performance. Many acquisitions fail either
because of ‘acquisition indigestion’ through buying too big targets or failed to
give the smaller acquisitions the time and attention it required.

c) Lack of Research: Acquisition requires gathering a lot of data and

information and analyzing it. It requires extensive research. A carelessly
carried out research about the acquisition causes the destruction of acquirer’s
wealth.

30
d) Diversification: Very few firms have the ability to successfully manage the
diversified businesses. Unrelated diversification has been associated with
lower financial performance, lower capital productivity and higher degree of
variance in performance for a variety of reasons including a lack of industry
or geographic knowledge, a lack of focus as well as perceived inability to gain
meaningful synergies. Unrelated acquisitions, which may appear to be very
promising, may turn out to be big disappointment in reality.

e) Unwieldy and inefficient: Conglomerate Amalgamations proliferated in

1960s and 1970s. Many conglomerates proved unwieldy and inefficient and
were wound up in 1980s and 1990s. The unmanageable conglomerates
contributed to the rise of various types of divestitures in the 1980s and 1990s.

f) Poor Cultural Fits: Cultural fit between an acquirer and a target is one of
the most neglected areas of analysis prior to the closing of a deal. However,
cultural due diligence in every bit is as important as careful financial analysis.
Without it, the chances are great that Amalgamation and Acquisition will
quickly amount to misunderstanding, confusion and conflict. Cultural due
diligence involve steps like determining the important of culture, assessing the
culture of both target and acquirer. It is useful to know the target management
behavior with respect to dimensions such as centralized versus decentralized
decision-making, speed indecision-making, time horizon for decisions, level
of teamwork, management of conflict, risk orientation, openness to change,
etc. It is necessary to assess the cultural fit between the acquirer and target
based on cultural profile. Potential sources of clash must be managed. It is
necessary to identify the impact of cultural gap, and develop and execute
strategies to use the information in the cultural profile to assess the impact that
the differences have.

31
g) Poor Strategic Fit: A Amalgamation will yield the desired result only if
there is strategic fit between the amalgamated companies. Amalgamations
with strategic fit can improve profitability through reduction in overheads,
effective utilization of facilities, the ability to raise funds at a lower cost, and
deployment of surplus cash for expanding business with higher returns. But
many a time lack of strategic fit between two amalgamated companies
especially lack of synergies results in Amalgamation failure. Strategic fit can
also include the business philosophies of the two entities (return on
investment v/s market share). The time frame for achieving these goals (short-
term v/s long-term) and the way in which assets are utilized. For example,
P&G-Gillette Amalgamation in consumer goods industry is a unique case of
acquisition by an innovative company to expand its product line by acquiring
another innovative company, which was, described analysis as a perfect
Amalgamation.

h) Faulty Evaluation: At times acquirers do not carry out the detailed

diligence of the target company. They make a wrong assessment of the
benefits from the acquisition and land up paying a higher price.

i) Poorly Managed Integration: Integration of the companies requires a

high quality management. Integration is very often poorly managed with little
planning and design. As a result implementation fails. The key variable for
success is managing the company better after the acquisition than it was
managed before. Even good deals fail if they are poorly managed after the
Amalgamation.

j) Failure to Set the Pace for Integration: The important task in the
Amalgamation is to integrate the target with acquiring company in every
respect. All function such as marketing commercial; finance, production,
design and personnel should be put in a place. In addition to the prominent

32
 persons of acquiring company the key persons from the acquired company
should be retained and given sufficient prominence opportunities in the
combined organization. Delay in integration leads to delay in product
shipment, development and slowdown in the company’s road map.
Acquisition of Scientific Data Corporation by Xerox in 1969 and AT&T’s
acquisition of computer maker NCR Corporation in 1991 were troubled deals,
which resulted in large write offs. The speed of integration is extremely
important because uncertainty and ambiguity for longer periods destabilizes
the normal organizational life.

k) Incomplete and Inadequate Due Diligence : Lack of due diligence is

lack of detailed analysis of all important features like finance, management
capability, physical assets as well as intangible assets results in failure. ISPAT
Steel is a corporate acquirer that conducts Amalgamation and Acquisition
activities after elaborate due diligence.

l) Failure to Get Figures Audited : It would be serious mistake if the

takeovers were concluded without a proper audit of financial affairs of the
target company. Though the company pays for the assets of the target
company, it also assumes responsibility to pay all the liabilities. Areas to look
for are stocks, sale ability of finished products, receivables and their
collectibles, details and location off fixed asserts, unsecured loans, claim
under litigation, loans from the promoters, etc. When ITC took over the
paperboard making unit of BILT near Coimbatore, it rearranged for
comprehensive audit of financial affairs of the unit. Many a times the acquirer
is mislead by window-dressed accounts of the target.

m) Strategic Alliance as an Alternative Strategy: Another feature of

1990s is the growth in strategic alliances as a cheaper, less risky route to a
strategic goal than takeovers.

33
 CHAPTER III

COMPANY PROFILE

34
 3.1. INDUSTRY PROFILE

Financial Services

The financial services sector contributed 15 per cent to India's GDP in FY09, and is
the second-largest component after trade, hotels, transport and communication all
combined together, as per the Banking & Finance Journal, released by an industry
body in August 2010.

Financial services, banking, insurance and real estate sectors rose by 8 per cent during
the quarter ended June 2010.

There are a total of 1,732 foreign funds registered with the Securities & Exchange
Board of India (SEBI).

Overseas funds infused US$ 4.78 billion in the capital market in November 2010,
taking the year-to-date total to US$ 39 billion. The total inflows of foreign
institutional investors (FIIs) as on December 2, 2010 have crossed the record US$
38.76 billion mark.

According to data available with SEBI, FIIs have made investments worth US$ 4.11
billion in equities and invested US$ 667.71 million into the debt market.

The average assets under management of the mutual fund industry stood at US$
160.44 billion for the month of September 2010, according to the data released by
Association of Mutual Funds in India (AMFI).

35
As on November 26, 2010, India's foreign exchange reserves totalled US$ 293.9
billion, according to the Reserve Bank of India's (RBI) Weekly Statistical
Supplement.

According to Venture Intelligence, a research firm, private equity investment in India

totaled US$ 6.57 billion in the first three quarters of 2010, which is more than double
the US$ 2.5 billion invested during the same period last year.

As of December 7, 2010, as many as 114 private equity investments have come from
domestic funds compared to 126 foreign ones, according to data available with
Venture Intelligence. In terms of value, PE firms promoted by Indians invested US$
1,751 million so far this year, as against US$ 4,377 million put in by foreign fund
investments, according to Venture Intelligence.

Also, a study by Project Finance International (PFI), a source of global project

finance intelligence and a Thomson Reuters publication has ranked India on top in the
global project finance (PF) market in 2009, ahead of Australia, Spain and the US.

The study said the main market for PF in 2009 was the domestic Indian market,
which raised US$ 30 billion, accounting for 21.5 per cent of the global PF market.
This was up from US$ 19 billion in 2008.

The number of mergers and acquisitions (M&A), private equity (PE) transactions and
Qualified Institutional Placements (QIP) increased close to 40 per cent to US$ 3.23
billion in November 2010. Besides, there have been US$ 9 billion plus deals so far in
2010, the highest seen in any year.

There were 64 deals announced in India in November this year compared with 63 in
the corresponding month last year, according to the latest data compiled by audit, tax
and advisory firm Grant Thornton. In November 2010, PE deal values amounted to

36
US$ 450 million, a growth of 14 per cent from a year ago period. The industry saw as
many as 19 PE deals in November 2010 as against 25 deals in November 2009. In
addition, as many as 43 M&A transactions were sealed worth US$ 2.7 billion in
November 2010.

Stock Markets

Market capitalisation of India as a proportion of world market cap has risen to a

record high. According to data sourced from Bloomberg, the country's market
capitalisation as a proportion of the world market cap is currently 3.34 per cent.
India's current market-cap is US$ 1.55 trillion as compared with world market-cap of
US$ 46.5 trillion. This is higher than 3.12 per cent share India enjoyed at the market
peak of January 2008.

Twenty Indian companies raised a significant US$ 1.2 billion through initial share
sale offers in the first three months of 2010, a period when global IPOs were worth
over US$ 53 billion, according to a report by global consultancy firm Ernst & Young.
With 20 IPOs in the first quarter of the year, India had the third largest number of
IPOs across the globe.

Overall, the primary market has witnessed robust inflows from FIIs this year and
cornered around 27 per cent of equity market inflows. Of the total FII investment of
US$ 28.4 billion, about US$ 7.7 billion have come into the primary markets,
according to SEBI data.

Fund raising by way of initial public offerings (IPOs), follow-on public offerings
(FPOs) and qualified institutional placements (QIPs) have totalled a record US$ 19.49
billion as of November 17, 2010, as per data from SMC Global Securities, beating the
previous high of US$ 14.51 billion in calendar year 2007.

37
Insurance

The Indian Life Insurance industry is one on the strongest growing sectors in the
country. Currently a US$ 41-billion industry, India is the fifth largest life insurance
market and growing at a rapid pace of 32-34 per cent annually. Currently, there are 22
life insurance companies operating in India, according to the Life Insurance Council
(LIC).

According to Insurance Regulatory and Development Authority (IRDA), total first

year premium collected in 2009-10 was US$ 24.64 billion, an increase of 25.46 per
cent over US$ 19.64 billion collected in 2008-09.

Further, according to IRDA, in October 2010, life insurance companies collected first
year premium worth US$ 542.19 million (individual single premium). For the period
upto October 2010, total premium collected by life insurance companies was US$
4.66 billion, as compared to US$ 2.39 billion collected in the same period of 2009
(individual single premium). The life insurance industry is expected to cross the US$
66.8 billion total premium income mark in 2010-11. "This year, we are expecting a
growth of 18 per cent in total premium income. If achieved, it is expected to cross the
US$ 64.4 billion mark," said SB Mathur, Secretary General, Life Insurance Council.
Total premium income, at US$ 56.04 billion, rose 18 per cent during 2009-10, against
US$ 47.6 billion in the previous year.

Banking Services
Indian bank credit rose by 22.7 percent to US$ 145.94 billion on the year as on
November 19, 2010 according to data released by RBI in its weekly statistical
supplement. Deposits were up by 15.8 per cent to US$ 146.59 billion year on year,
according to the data.

38
 3.2 COMPANY PROFILE

About the Company

Angel Booking’s tryst with excellence in customer relations began more than 20 years
ago. Angel Group has emerged as one of the top 10 retail broking houses in India and
incorporated in 1987. Today, Angel has emerged as a premium Indian stock-broking
and wealth management house, with an absolute focus on retail business and a
commitment to provide "Real Value for Money" to all its clients.

It has memberships on BSE, NSE and the leading commodity exchanges in India
NCDEX & MCX. Angel is also registered as a depository participant with CDSL.

Angel Group Companies

Member on the BSE and Depository Participant

Angel Broking Ltd.
with CDSL

Angel Capital & Debt Market Membership on the NSE Cash and Futures &
Ltd. Options Segment

Angel Commodities Broking

Member on the NCDEX & MCX
Ltd.

Angel Securities Ltd. Member on the BSE

 Incorporated :1987

 BSE Membership :1997

 NSE membership :1998

 Member of NCDEX and MCX

39
  Depository Participants with CDSL

Angel’s presence-

 Nation- wide network of 21 regional hubs

 Presence 124 cities

 6800 + sub brokers & business associates

 5.9 lakh +clients

Management
S.No Name Designation & Department
1. Mr. Dinesh Thakkar Founder Chairman & Managing Director
2. Mr. Lalit Thakkar Director – Research
3. Mr. Amit Majumdar Executive Director – Strategy and Finance
4. Mr. Rajiv Phadke Executive Director – HR & Corp
5. Mr. Vinay Agrawal Executive Director – Equity Broking
6. Mr. Nikhil Daxini Executive Director - Sales and Marketing
Mr. Hitungshu Executive Director - Distribution & Wealth
7
Debnath Management
Mr. Mudit
8. Executive Director – Operations
Kulshreshtha

40
 Milestones

 Awarded with 'Broking House with Largest Distribution Network' and 'Best
Retail Broking House' at Dun & Bred street Equity Broking Awards 2009

 August, 2008 Crossed 500000 trading accounts

● November, 2007 ‘Major Volume Driver’ for 2007

● December, 2006 Created 2500 business associates
● October, 2006 ‘Major Volume Driver’ award for 2006
● September, 2006 Launched Mutual Fund and IPO business
● July, 2006 Launched the PMS function
● October, 2005 ‘Major Volume Driver’ award for 2005
● September, 2004 Launched Online Trading Platform
● April, 2004 Initiated Commodities Broking division
● April, 2003 First published research report
● November, 2002 Angel’s first investor seminar
● March, 2002 Developed web-enabled back office software
● November, 1998 Angel Capital and Debt Market Ltd. Incorporated
● December, 1997 Angel Broking Ltd. Incorporated

41
Vision of the Company

To provide best value for money to investors through innovative products, trading /
investment strategies, state-of-the-art technology and personalized service

Philosophy of the Company

Ethical practices & transparency in all our dealings customer interest above our own
always deliver what we promise effective cost management.

Quality Assurance Policy

We are committed to being the leader in providing World Class Product & Services
which exceed the expectations of our customers Achieved by teamwork
and a process of continuous improvement

CRM Policy

A Customer is the most important visitor on our premises. He is not dependent on us

but we are dependent on him. He is not interruption in our work, but is
the Purpose of it. We are not doing him a favour by serving. He is doing
us a favour by giving us an opportunity to do so

42
Logo of the company

43
OUR ORGANIZATIONAL STRUCTURE

CSO (Central
Support Office)

Regional Office Regional Office Regional Office

Branches & Franchise Branches & Franchise

Branches & Franchise Branches
Branches
Branches

Angel Clients Business Associates

Angel Clients

Products of Angel Broking

● Online Trading

● Commodities

● DP Services

● PMS (Portfolio Management Services)

● Insurance

● IPO Advisory

● Mutual Fund

● Personal loans

● Quality Assurance

44
E-Broking

Angle has different products and voila trading on BSC, NSC, F&O, MCX &
NCDEX. It provides four softwares to customers for online trading.
Angel Investor
 User-friendly browser for investors
 Easy online trading platform
 Works in proxy and firewall system set up
 Integrated Back office: Access account information – anytime,
anywhere
 Streaming quotes
 Refresh static rates when required
 Multiple exchanges on single screen
 Online fund transfer facility

Angel Trade

 Browser based for investor

 No installation required
 Advantage of mobility
 Trading as simple as internet surfing
 BSC, NSC, F&O, MCX & NCDEX

Angel Diet

 Application based ideal for traders.

 Multiple exchanges on single screen
 Online fund transfer facility
 User friendly & simple navigation

45
  BSC, NSC, F&O, MCX & NCDEX

Angel Anywhere

 Application-based platform for day traders

 Intra-day/historical charts with various indicators
 Online fund transfer facility
 BSC, NSC, Cash & Derivatives

Investment Advisory Services

To derive optimum returns from equity as an asset class requires professional

guidance and advice. Professional assistance will always be beneficial in wealth
creation. Investment decisions without expert advice would be like treating ailment
without the help of a doctor.

● Expert Advice: Their expert investment advisors are based at various

branches across India to provide assistance in designing and monitoring
portfolios.

● Timely Entry & Exit: Their advisors will regularly monitor

customers’ investments and guide customers to book timely profits. They will
also guide them in adopting switching techniques from one stock to another
during various market conditions.
● De-Risking Portfolio: A diversified portfolio of stocks is always
better than concentration in a single stock. Based on their research, They
diversify the portfolio in growth oriented sectors and stocks to minimize the risk
and optimize the returns.

46
Commodities

A commodity is a basic good representing a monetary value. Commodities are most

often used as inputs in the production of other goods or services. With the advent of
new online exchange, commodities can now be traded in futures markets. When they
are traded on an exchange, Commodities must also meet specified minimum
standards known as basic grade.

Types of Commodities
● Precious Metals : Gold and Silver
● Base Metals : Copper, Zinc , Steel and Aluminum
● Energy : Crude Oil, Brent Crude and Natural Gas
● Pulses : Chana , Urad and Tur
● Spices : Black Pepper, Jeera, Turmeric , Red Chili
● Others : Guar Complex, Soy Complex, Wheat and Sugar

Benefits at Angel
● Three different online products tailored for traders & investors.
● Single Screen customized market-watch for MCX / NCDEX with BSE / NSE.
● Streaming Quotes and real time Rates. Intra-day trading calls.
● Research on 25 Agro Commodities, Precious and Base Metals, Energy
products and Polymers.
● An array of daily, weekly and special research reports.
● Highly skilled analysts with professional industry experience.
● Active relationship management desk.
● Seminars, workshops and investment camps for investors

47
Depositary Participant Services
Angel Broking Ltd. is a DP services provider though CDSL. We offer depository
services to create a seamless transaction platform to execute trades through Angel
group of companies and settle these transactions through Angel Depository services.
● Wide branch coverage
● Personalized/attentive services of trained a dedicated staff
● Centralized billing & accounting
● Acceptance & execution of instruction on fax
● Daily statement of transaction & holdings statement on e-mail
● No charges for extra transaction statement & holdings statement

Portfolio Management Services

Successful investing in Capital Markets demands ever more time and expertise.
Investment Management is an art and a science in itself. Portfolio Management
Services (PMS) is one such service that is fast gaining eminence as an investment
avenue of choice for High Net worth Investors (HNI). PMS is a sophisticated
investment vehicle that offers a range of specialized investment strategies to
capitalize on opportunities in the market. The Portfolio Management Service
combined with competent fund management, dedicated research and technology,
ensures a rewarding experience for its clients.
Mutual Fund
To enable clients to diversify their investment in the right direction. Angel Broking
has added another product in its range with mutual funds.
● Access to in-depth research & proper selection from diversified funds based
on your preferred criteria
● Rating and rankings of all mutual funds from our in house expert analysts
● News and alert for your Mutual fund Portfolio and performance tracking with
watch lists

48
 ● Current and historical performance of different funds enabling comparisons

Benefits

● No risk of loss, wrong transfer, mutilation or theft of share certificates.

● Hassle free automated pay-in of your sell obligations by your clearing
members
● Reduced paper work.
● Speedier settlement process. Because of faster transfer and registration of
securities in your account, increased liquidity of your securities.
● Instant disbursement of non-cash benefits like bonus and rights into your
account.
● Efficient pledge mechanism.

FUNDAMENTAL SERVICES

The Sunday Weekly Report

This weekly report is ace of all the reports. It offers a comprehensive market
overview and likely trends in the week ahead. It also presents top picks based on an
in-depth analysis of technical and fundamental factors. It gives short term and long-
term outlook on these scripts, their price targets and advice trading strategies. Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis.
Stock Analysis
Angel’s stock research has performed very well over the past few years and angel
model portfolio has consistently outperformed the benchmark indices. The
fundamentals of select scripts are thoroughly analyzed and actionable advice is
provided along with investment rationale for each scrip.

49
Flash News
Key developments and significant news announcement that are likely to have an
impact on market / scripts are flashed live on trading terminals. Flash news keeps the
market men updated on an online basis and helps them to reshuffle their holdings
TECHNICAL SERVICES

Intra-Day Calls

For day trader’s angel provides intraday calls with entry, exit and stop loss levels
during the market hours and our calls are flashed on our terminals. Our analysts
continuously track the calls and provide the recommendations according to the
market movements. Past performance of these calls in terms of profit/loss is also
available to our associates to enable them to judge the success rate.

Posting Trading Calls

Angels “Position Trading Calls” are based on a through analysis of the price
movements in selected scripts and provides calls for taking positions with a 10 - 15
days time span with stop losses and targets. These calls are also flashed on our
terminals during market hours.

Derivative Strategies
Our analyst take a view on the NIFTY and selected scripts based on derivatives and
technical tools and devise suitable “Derivative Strategies” , which are flashed on our
terminals and published in our derivative reports.

Future Calls

50
A customized product for HNIs to help them trade with leveraged positions wherein
clients are advised on stocks with entry, exit and stop loss levels for short-term
benefits. Over and above this, financial status of the calls is mentioned at all times.

CHAPTER V

DATA ANALYSIS & INTERPRETATIONS

51
M&A in India:
The process of mergers and acquisitions has gained substantial importance in today's
corporate world. This process is extensively used for restructuring the business
organizations. In India, the concept of mergers and acquisitions was initiated by the
government bodies. The Indian economic reform since 1991 has opened up a whole
lot of challenges both in the domestic and international spheres. The increased
competition in the global market has prompted the Indian companies to go for
mergers and acquisitions as an important strategic choice. The trends of mergers and
acquisitions in India have changed over the years. The immediate effects of the
mergers and acquisitions have also been diverse across the various sectors of the
Indian economy.

Mergers and Acquisitions in India: the Latest Trends

Till recent past, the incidence of Indian entrepreneurs acquiring foreign enterprises
was not so common. The situation has undergone a sea change in the last couple of
years. Acquisition of foreign companies by the Indian businesses has been the latest
trend in the Indian corporate sector. There are different factors that played their parts
in facilitating the mergers and acquisitions in India. Favorable government policies,
buoyancy in economy, additional liquidity in the corporate sector, and dynamic
attitudes of the Indian entrepreneurs are the key factors behind the changing trends of
mergers and acquisitions in India.

The Indian IT and ITES sectors have already proved their potential in the global
market. The other Indian sectors are also following the same trend. The increased
participation of the Indian companies in the global corporate sector has further
facilitated the merger and acquisition activities in India. India is going to have many
of such deals in the service sector also as it has already started proving itself as an
important player in this field .

52
Nature and Significance of Indian Deals

The corporate sector all over the world is restructuring its operations through different
types of consolidation strategies like mergers and acquisitions in order to face
challenges posed by the new pattern of globalization, which has led to the greater
integration of national and international markets. The intensity of such operations is
increasing with the de-regulation of various government policies as a facilitator of the
neo-liberal economic regime.

The Indian corporate sector too experienced such a boom in mergers and acquisitions
that led restructuring strategies especially after liberalization, this is due to the
increasing presence of subsidiaries of big Multi National Corporations (MNC) here as
well as due to the pressure exerted by such strategies on the domestic firms. Besides,
many MNCs realized the fact that the Indian market is a consumer base to meet their
desired objectives. Thus the entry is unavoidable.

The post reform period has been associated with a large amount of cross-border deals
all around the world and despite the dominance of developed nations in it; such deals
is increasing in the developing countries such as India. India adapted its policies to
facilitate globalization since the mid 1980s. Competition became the ground reality
and firms were forced to adopt different strategies to face competition in India as
well. As we said earlier, firms preferred to get into mergers and acquisitions in order
to face the challenges posed by globalization. In this context, the present section tries
to understand, to what extent foreign firms are entering into the Indian market
through this route, the most preferred deal makers in India as well as the preferred
sectors in which it is occurring.

53
Some major M&A in India in the past:

 Tata Steel acquired 100% stake in Corus Group in 2007. It was an all cash
deal which cumulatively amounted to $12.2 billion.

 Vodafone purchased administering interest of 67% owned by Hutch-Essar

for a total worth of $11.1 billion in 2007.
 India Aluminum and copper giant Hindalco Industries purchased Canada-
based firm Novelis Inc in February 2007. The total worth of the deal was
$6-billion.
 Indian pharma industry registered its first biggest in 2008 M&A deal
through the acquisition of Japanese pharmaceutical company Daiichi
Sankyo by Indian major Ranbaxy for $4.5 billion.
 The Oil and Natural Gas Corp purchased Imperial Energy Plc in January
2009. The deal amounted to $2.8 billion and was considered as one of the
biggest takeovers after 96.8% of London based companies' shareholders
acknowledged the buyout proposal.
 In November 2008 NTT DoCoMo, the Japan based telecom firm acquired
26% stake in Tata Teleservices for USD 2.7 billion.
 India's financial industry saw the merging of two prominent banks - HDFC
Bank and Centurion Bank of Punjab. The deal took place in February 2008
for $2.4 billion.
 Tata Motors acquired Jaguar and Land Rover brands from Ford Motor in
March 2008. The deal amounted to $2.3 billion.
 Dr. Reddy's Labs acquired Betapharm through a deal worth of $597
million.
 2009 saw the acquisition Asarco LLC by Sterlite Industries Ltd's for $1.8
billion making it ninth biggest-ever M&A agreement involving an Indian
company.

54
  In May 2007, Suzlon Energy obtained the Germany-based wind turbine
producer Repower. The 10th largest in India, the M&A deal amounted to
$1.7 billion.

Laws governing Mergers and Acquisition in India:

Mergers and Acquisitions in India are governed by the Indian Companies Act,
1956, under Sections 391 to 394 and The Competition Act, 2002. Although
mergers and acquisitions may be instigated through mutual agreements between
the two firms, the procedure remains chiefly court driven. The approval of the
High Court is highly desirable for the commencement of any such process and the
proposal for any merger or acquisition should be sanctioned by a 3/4th of the
shareholders or creditors present at the General Board Meetings of the concerned
firm.

The entry limits for companies merging under the Indian law are considerably
high. The entry limits are allocated in context of asset worth or in context of the
company's annual incomes. The entry limits in India are higher than the European
Union and are twofold as compared to the United Kingdom. The Indian M&A
laws also permit the combination of any Indian firm with its international
counterparts, providing the cross-border firm has its set up in India.

There have been recent modifications in the Competition Act, 2002. It has replaced
the voluntary announcement system with a mandatory one. Out of 106 nations which
have formulated competition laws, only 9 are acclaimed with a voluntary
announcement system.

Some changes made:

55
The entire process of filing for a corporate before the Competition Commission of
India is going to become a much cheaper process because the entire costs of filing
have been drastically reduced. Initially, as part of the draft regulations, the filing was
running into absurd amount of Rs 40 lakhs. That’s been brought down to around Rs
50,000-25,000 levels. Therefore, that is a considerable relief as far as corporate are
concerned filing becomes cheaper. Also there is a great deal of clarity as far as
applicability of corporate is concerned. There is a very clear clause which says that
only those deals, which are being approved by the board of the company on or after
June 1, 2011, need to apply.

PROFILE OF RELIANCE INDUSTRIES LIMITED

56
Reliance Industries Limited, together with its subsidiaries, engages in the exploration
and production of oil and gas in India and internationally. It also engages in the
production and marketing of petrochemical products, such as high and low density
polyethylene, polypropylene, polyvinyl chloride, poly butadiene rubber, polyester
yarn, polyester fibers, purified terephthalic acid, paraxylene, ethylene glycol, olefins,
aromatics, butadiene, linear alkyl benzene, butadiene, acrylonitrile, caustic soda, and
polyethylene terephthalate.

In addition, the company involves in refining petroleum products, including LPG,

propylene, naphtha, gasoline, jet/aviation turbine fuel, kerosene, high speed diesel,
sulphur, and petroleum coke, as well as engages in lubricants and petroleum retail.
Additionally, the company produces various textiles, such as suitings, shirtings,
readymade garments, furnishing fabrics, day curtains, automotive upholstery, ready-
to-stitch, and take away fabric.

It also operates retail stores, including food and grocery specialty stores; mini
hypermarkets; hypermarkets; electronics specialty stores; Apple stores; apparel
specialty stores; health, wellness, and pharma specialty stores; footwear specialty
stores; jewelry specialty stores; convenience shopping; books, music, toys, gifts,
kitchen solutions, furniture, furnishing and home ware, and automotive services and
products specialty stores, as well as offers transportation fuels, fleet management
services, highway hospitality services, and vehicle care services.

The company was founded in 1966 and is based in Mumbai, India.

PROFILE OF RELIANCE PETROLEUM LIMITED

57
Reliance Petroleum Limited focuses on setting up a greenfield petroleum refinery and
polypropylene plant at Jamnagar in the state of Gujarat in western India. Reliance
Petroleum Limited was set up by Reliance Industries Limited (RIL), one of India's
largest private sector companies based in Mumbai. RPL also benefits from a strategic
alliance with Chevron India Holdings Pte Limited, Singapore, a wholly owned
subsidiary of Chevron Corporation USA (Chevron), which currently holds a 5%
equity stake in the Company.

Refining activities of Reliance Industries Limited are carried out at the Jamnagar
refinery complex with refining capacity of 27 million tonnes per annum (540,000
barrels per day). The refinery is able to process a wide variety of crudes- from very
light to very heavy (from 18 to 45 degree API) and from sweet to very heavy (with
sulphur content from 0 to 4.5%).

With an annual crude processing capacity of 580,000 barrels (92,000 m3) per stream
day (BPSD), RPL will be the sixth largest refinery in the world. It will have a
complexity of 14.0, using the Nelson Complexity Index, ranking it amongst the
highest in the sector. The polypropylene plant will have a capacity to produce 0.9
million metric tonnes per annum.

The refinery project is being implemented at a capital cost of Rs 270,000 million

being funded through a mix of equity and debt. This represents a capital cost of less
than US $10,000 per barrel per day and compares very favourably with the average
capital cost of new refineries announced in recent years. The International Energy
Agency (IEA) estimates the average capital cost of new refinery in the OECD nations
to be in the region of US $15,000 to 20,000 per barrel per day. The low capital cost of
RPL becomes even more attractive when adjusted for high complexity of the refinery.

RIL – RPL MERGER ANALYSIS

58
MERGER HIGHLIGHTS

 Merger is India’s largest ever

 RPL shareholders to receive 1 (one) share of RIL for every 16 (sixteen) shares
of RPL
 RIL’s holding in RPL to be cancelled. No fresh treasury stock created
 RIL to be a top 10 private sector refining company globally
 RIL to become the world’s largest producer of Ultra Clean Fuels at single
location
 Merger to unlock greater efficiency from scale and synergies
 Merger to be EPS accretive
 RIL to have 3.7 million shareholders

MERGER BENEFITS AND SYNERGIES

The merger will unlock significant operational and financial synergies that exist
between RIL and RPL. It creates a platform for value-enhancing growth and
reinforces RIL’s position as an integrated global energy company.

The merger will enhance value for shareholders of both companies. The merger is
EPS accretive for RIL. Through this merger, RIL consolidates a world-class, complex
refinery with minimal residual project risk, while complementing RIL’s product
range. There will be further gains from reduced operating costs arising from synergies
of a combined operation. The merger is expected to reduce the earnings volatility for
RPL shareholders and allows them to participate in the full energy value chain of
RIL.

THE MERGER WILL RESULT IN RIL:

59
• Operating two of the world’s largest, most complex refineries
• Owning 1.24 million barrels per day (MBPD) of crude processing capacity, the
largest refining capacity at any single location in the world
• Emerging as the world’s 5th largest producer of Polypropylene

MERGER DETAILS:

Under the terms of the proposed merger, RPL shareholders will receive 1 (one) share
of RIL for every 16 (sixteen) RPL shares held by them. The appointed date of merger
of RPL with RIL is 1st April 2008. RIL will cancel its holding in RPL.

Based on the recommended merger ratio, RIL will issue 6.92 crore new equity shares
to the existing shareholders of RPL. This will result in a 4.4% increase in equity base
from Rs 1,574 crore to Rs 1,643 crore. Consequently, the promoter holding in RIL
will reduce from 49.0% to 47.0%

Advisors to the merger are as follows:

Valuation Advisors: Ernst & Young And Morgan Stanley India
Transaction Advisors: JM Financial Consultants and Kotak Mahindra Capital
Fairness Opinion: DSP Merrill Lynch (for RIL) & Citigroup Global Markets (RPL)
Legal Advisor: Amarchand & Mangaldas & Suresh A. Shroff & Co.
Tax Advisor: PriceWaterhouse and Coopers

COMPARATIVE BALANCE SHEET OF

RIL BEFORE & AFTER THE MERGER

60
In Rs Cr Mar '06 Mar '07 Mar '08 Mar '09 Mar '10
12 mths 12 mths 12 mths 12 mths 12 mths
Sources Of Funds
Total Share Capital 1,393.17 1,393.21 1,453.39 1,573.53 3,270.37
Equity Share Capital 1,393.17 1,393.21 1,453.39 1,573.53 3,270.37
Share Application Money 0.00 60.14 1,682.40 69.25 0.00
Reserves 43,760.90 59,861.81 77,441.55 112,945.44 125,095.97
Revaluation Reserves 4,650.19 2,651.97 871.26 11,784.75 8,804.27
Net worth 49,804.26 63,967.13 81,448.60 126,372.97 137,170.61
Secured Loans 7,664.90 9,569.12 6,600.17 10,697.92 11,670.50
Unsecured Loans 14,200.71 18,256.61 29,879.51 63,206.56 50,824.19
Total Debt 21,865.61 27,825.73 36,479.68 73,904.48 62,494.69
Total Liabilities 71,669.87 91,792.86 117,928.28 200,277.45 199,665.30
Application of Funds
Gross Block 84,970.13 99,532.77 104,229.10 149,628.70 215,864.71

Less: Accum. Depreciation 29,253.38 35,872.31 42,345.47 49,285.64 62,604.82

Net Block 55,716.75 63,660.46 61,883.63 100,343.06 153,259.89
Capital Work in Progress 6,957.79 7,528.13 23,005.84 69,043.83 12,138.82
Investments 5,846.18 16,251.34 20,516.11 20,268.18 19,255.35
Inventories 10,119.82 12,136.51 14,247.54 14,836.72 26,981.62
Sundry Debtors 4,163.62 3,732.42 6,227.58 4,571.38 11,660.21
Cash and Bank Balance 239.31 308.35 217.79 500.13 362.36
Total Current Assets 14,522.75 16,177.28 20,692.91 19,908.23 39,004.19
Loans and Advances 8,266.55 12,506.71 18,441.20 13,375.15 10,517.57
Fixed Deposits 1,906.85 1,527.00 5,609.75 23,014.71 17,073.56
Total CA, Loans &
Advances 24,696.15 30,210.99 44,743.86 56,298.09 66,595.32
Current Liabilities 17,656.02 24,145.19 29,228.54 42,664.81 48,018.65
Provisions 3,890.98 1,712.87 2,992.62 3,010.90 3,565.43
Total CL & Provisions 21,547.00 25,858.06 32,221.16 45,675.71 51,584.08
Net Current Assets 3,149.15 4,352.93 12,522.70 10,622.38 15,011.24
Total Assets 71,669.87 91,792.86 117,928.28 200,277.45 199,665.30
Contingent Liabilities 24,897.66 46,767.18 37,157.61 36,432.69 25,531.21
Book Value (Rs) 324.03 439.57 542.74 727.66 392.51

COMPARATIVE INCOME STATEMENTS OF

RIL BEFORE & AFTER THE MERGER

61
 Mar '06 Mar '07 Mar '08 Mar '09 Mar '10
In Rs. Cr. 12 mths 12 mths 12 mths 12 mths 12 mths
Income
Sales Turnover 89,124.46 118,353.71 139,269.46 146,328.07 200,399.79
Excise Duty 8,246.67 6,654.68 5,463.68 4,369.07 8,307.92
Net Sales 80,877.79 111,699.03 133,805.78 141,959.00 192,091.87
Other Income 546.96 236.89 6,595.66 1,264.03 3,088.05
Stock Adjustments 2,131.19 654.60 -1,867.16 427.56 3,947.89
Total Income 83,555.94 112,590.52 138,534.28 143,650.59 199,127.81
Expenditure
Raw Materials 59,739.29 80,791.65 98,832.14 109,284.34 153,689.01
Power & Fuel Cost 1,146.26 2,261.69 2,052.84 3,355.98 2,706.71
Employee Cost 978.45 2,094.09 2,119.33 2,397.50 2,330.82
Other Manufacturing
Expenses 668.31 1,112.17 715.19 1,162.98 2,153.67
Selling & Admin Exp 5,872.33 5,478.10 5,549.40 4,736.60 5,756.44
Misc. Exp 300.74 321.23 412.66 562.42 651.96
Preop Exp Capitalised -155.14 -111.21 -175.46 -3,265.65 -1,217.92
Total Expenses 68,550.24 91,947.72 109,506.10 118,234.17 166,070.69
Operating Profit 14,458.74 20,405.91 22,432.52 24,152.39 29,969.07
PBDIT 15,005.70 20,642.80 29,028.18 25,416.42 33,057.12
Interest 893.61 1,298.90 1,162.90 1,774.47 1,999.95
PBDT 14,112.09 19,343.90 27,865.28 23,641.95 31,057.17
Depreciation 3,400.91 4,815.15 4,847.14 5,195.29 10,496.53
Profit Before Tax 10,711.18 14,528.75 23,018.14 18,446.66 20,560.64
Extra-ordinary items 0.88 0.51 48.10 0.00 0.00
PBT (Post Ext-ord
Items) 10,712.06 14,529.26 23,066.24 18,446.66 20,560.64
Tax 1,642.72 2,585.35 3,559.85 3,137.34 4,324.97
Reported Net Profit 9,069.34 11,943.40 19,458.29 15,309.32 16,235.67
Total Value Addition 8,810.95 11,156.07 10,673.96 8,949.83 12,381.68
Equity Dividend 1,393.51 1,440.44 1,631.24 1,897.05 2,084.67
Corp Dividend Tax 195.44 202.02 277.23 322.40 346.24
Per share data (annualised)
Shares in issue (laks) 13,935.08 13,935.08 14,536.49 15,737.98 32,703.74
EPS (Rs) 65.08 85.71 133.86 97.28 49.64
Equity Dividend (%) 100.00 110.00 130.00 130.00 70.00
Book Value (Rs) 324.03 439.57 542.74 727.66 392.51

62
 RATIO ANALYSIS OF

RIL BEFORE & AFTER THE MERGER

INVESTMENT VALUATION RATIOS

Mar Mar Mar Mar

Investment Valuation Ratios '06 '07 '08 '09 Mar '10

Face Value 10.00 10.00 10.00 10.00 10.00

Dividend Per Share 10.00 11.00 13.00 13.00 7.00

Oper. Profit Per Share (Rs) 103.76 146.44 154.32 153.47 91.64

Net Oper. Profit/Share (Rs) 580.39 801.57 920.48 902.02 587.37

Free Res. Per Share (Rs) 301.36 416.90 520.59 704.28 378.21

Bonus in Equity Capital 34.58 34.57 33.14 30.61 64.47

Deal Analysis of Tata - Corus Acquisition

Tata acquired Corus, which is four times larger than its size and the largest steel
producer in the U.K. The deal, which creates the world's fifth-largest steelmaker, is

63
India's largest ever foreign takeover and follows Mittal Steel's $31 billion acquisition
of rival Arcelor in the same year. India’s first Fortune 500 MNC was born.

Tata acquired Corus on the 2nd of April 2007 for a price of $12 billion making the
Indian company the world’s fifth largest steel producer. This acquisition process has
started long back in the year 2005. In 2005, when the deal was started the price per
share was 455 pence. But during the time of acquisition held in 2007, the price per
share was 608 pence, which is 33.6% higher than the first offer. For this deal Tata has
financed only $4 billion, although the total price of this deal was $12billion.

Tata Steel – Tata Steel formerly known as TISCO and Tata Iron and Steel
Company Limited is the world's seventh largest steel company, with an annual crude
steel capacity of 31 million tones. It is the largest private sector steel company in
India in terms of domestic production.
Corus – Corus Group plc was formed on 6th October 1999, through the merger of
two companies, British Steel and Koninklijke Hoogovens, following the privatization
of many steelworks companies by the U.K. government. The company consists of
four divisions which include: Strip Products, Long Products, Aluminum and
Distribution and Building Systems. With headquarters in London, Corus operates as
an international company, satisfying the demand of many steel customers worldwide.
Its core business comprises of manufacturing, development and allocation of steel and
aluminum products and services. The company has a wide variety of products and
services which comprise of the manufacturing of electrical steel, narrow strip, plates,
packaging steel, plated steel strip, semi finished steel, tube products, wire rod and rail
products and services. However, the company is also engaged in providing a variety
of services including design, technology and consultancy services.

What led to this acquisition?

64
 Tata was one of the lowest cost steel producers in the world and had self
sufficiency in raw material. Corus was fighting to keep its productions costs under
control and was on the look out for sources of iron ore.

 Tata had a strong retail and distribution network in India and SE Asia. This
would give the European manufacturer a in-road into the emerging Asian markets.
Tata was a major supplier to the Indian auto industry and the demand for value
added steel products was growing in this market. Hence there would be a
powerful combination of high quality developed and low cost high growth
markets

 There would be technology transfer and cross-fertilization of R&D

capabilities between the two companies that specialized in different areas of the
value chain

 There was a strong culture fit between the two organizations both of which
highly emphasized on continuous improvement and ethics

SWOT Analysis:

65
Strengths: Opportunities:

 Lowest cost producer in the world  Consolidation trend in steel industry

 Stable Balance Sheet
 CNS’s tarnished image after 2002
negotiations

 Exposure to the global market

Weakness: Threats:

 Corus was triple size of Tata Steel  Brazilian player ‘CSN’.

in terms of production  Russian player ‘Severstal’

 No committed financers to support

the possible deal

The Deal:

66
 Corus Steel has decided to acquire a strategic partnership with a
September 20,2006
Company that is a low cost producer
The Indian steel giant, Tata Steel wants to fulfill its ambition to expand
October 5,2006
its business further.
The initial offer from Tata Steel is considered to be too low both Corus
October 6,2006
and analyst .
October 17,2006 Tata Steel has kept its offer to 455p per share.

October 18,2006 Tata still doesn’t react to Corus and its bid price remains the same.

Tata Steel announced that it had agreed to pick up a 100% stake in the
October 20,2006 Anglo-Dutch steel maker Corus at 455 pence per share in an all cash
deal, cumulatively valued at GBP 4.3 billion (USD 8.04 billion).

The Brazilian Steel Group CSN recruits a leading investment bank to

October 23,2006
offer advice on possible counter-offer to Tata Steel’s bid.

Corus is criticized by the chairman of JCB, Sir Anthony Bamford, for

October 27,2006
its decision to accept an offer from Tata.
The Russian steel giant Severstal announces officially that it will not
November 3,2006
make a bid for Corus

the Brazilian steel company CSN launched a counter offer for Corus at
November 19,2006
475 pence per share, valuing it at $8.4 billion.

The board of Corus decides that it is in the best interest of its will
November 27,2006 shareholders to give more time to CSN to satisfy the preconditions and
decide whether it issue forward a formal offer
Tata preemptively upped the offer to 500 pence, which was within
hours trumped by CSN's offer of 515 pence per share, valuing the deal
December 11,2006
at $ 9.6 Billion. The Corus board promptly recommended both the
revised offers to its shareholders.

67
 CSN announced a formal offer for the Company at an offer price of 515
pence per Corus Share , valuing the deal at $ 9.6 Billion.. The CSN
Acquisition would also be implemented by way of a scheme of
December 11,2006 arrangement and is subject to a pre-condition that either Corus
Shareholders reject the Tata Scheme or the Tata Scheme is otherwise
withdrawn by Corus or lapses. The Corus board promptly
recommended both the revised offers to its shareholders.
UK Watchdog the Panel on Takeovers and Mergers announced that the
last date for each of Tata and CSN to announce revised offers for the
December 19,2006 Company, should they wish to do so, is 30 January 2007. They also
warned that it would begin an auction procedure if the two remained in
competition.
Tata Steel won their bid for Corus after offering 608 pence per share,
January 31,2007
valuing Corus at $11.3bn
Tata Steel manages to win the acquisition to CSN and has the full
April 2,2007
voting support form Corus’ shareholders

Advisors to the deal:

 Acquirer Advisors – ABN Amro , Deutsche Bank , Rothchild

 Target / Seller Advisors - CSFB , JP Morgan , Cazenove , HSBC Securities
and Capital Market

Funding of the deal:

The acquisition by Tata amounted to a total of 608 pence per ordinary share or ₤6.2
billion (US $12 billion) which was paid in cash. Tata surprised the ‘credit default
swap’ segment of the derivative markets by deciding to raise $6.17bn of debt for the
deal through a new subsidiary of Corus called 'Tata Steel UK', rather than by raising
the debt itself.

68
  $3.5–3.8bn infusion from Tata Steel ($2bn as its equity contribution, $1.5–
1.8bn through a bridge loan)
 $5.6bn through a LBO ($3.05bn through senior term loan, $2.6bn through
high yield loan)

Balance Sheet of Tata Steel before and after the acquisition:

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10
Sources Of Funds
Total Share Capital 553.67 580.67 6,203.30 6,203.45 887.41
Equity Share Capital 553.67 580.67 730.78 730.79 887.41
Share Application Money 0 147.06 0 0 0
Preference Share Capital 0 0 5,472.52 5,472.66 0
Reserves 9,201.63 13,368.42 21,097.43 23,501.15 36,281.34
Networth 9,755.30 14,096.15 27,300.73 29,704.60 37,168.75
Secured Loans 2,191.74 3,758.92 3,520.58 3,913.05 2,259.32
Unsecured Loans 324.41 5,886.41 14,501.11 23,033.13 22,979.88
Total Debt 2,516.15 9,645.33 18,021.69 26,946.18 25,239.20
Total Liabilities 12,271.45 23,741.48 45,322.42 56,650.78 62,407.95
Application Of Funds
Gross Block 15,407.17 16,029.49 16,479.59 20,057.01 22,306.07
Less: Accum. Depreciation 6,699.85 7,486.37 8,223.48 9,062.47 10,143.63
Net Block 8,707.32 8,543.12 8,256.11 10,994.54 12,162.44
Capital Work in Progress 1,157.73 2,497.44 4,367.45 3,487.68 3,843.59
Investments 4,069.96 6,106.18 4,103.19 42,371.78 44,979.67
Inventories 2,174.75 2,332.98 2,604.98 3,480.47 3,077.75
Sundry Debtors 539.4 631.63 543.48 635.98 434.83
Cash and Bank Balance 288.35 446.51 465 463.58 500.3
Total Current Assets 3,002.50 3,411.12 3,613.46 4,580.03 4,012.88
Loans and Advances 1,994.46 4,025.95 34,582.84 5,884.61 6,678.55
Fixed Deposits 0.04 7,234.84 0.04 1,127.02 2,733.84
Total CA, Loans &
Advances 4,997.00 14,671.91 38,196.34 11,591.66 13,425.27
Deffered Credit 0 0 0 0 0

69
 Current Liabilities 4,552.39 6,349.24 6,842.26 8,965.76 8,699.34
Provisions 2,361.44 1,930.46 2,913.52 2,934.19 3,303.68
Total CL & Provisions 6,913.83 8,279.70 9,755.78 11,899.95 12,003.02
Net Current Assets -1,916.83 6,392.21 28,440.56 -308.29 1,422.25
Miscellaneous Expenses 253.27 202.53 155.11 105.07 0
Total Assets 12,271.45 23,741.48 45,322.42 56,650.78 62,407.95

Profit and Loss A/C of Tata Steel before and after the acquisition:

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

Income

Sales Turnover 17,136.92 19,756.84 22,191.43 26,843.53 26,757.60

Excise Duty 2,004.83 2,304.18 2,537.02 2,495.21 1,816.95

Net Sales 15,132.09 17,452.66 19,654.41 24,348.32 24,940.65

Other Income 252.58 362.12 586.41 603.07 1,241.08

Stock Adjustments 104.91 82.47 38.73 289.27 -134.97

Total Income 15,489.58 17,897.25 20,279.55 25,240.66 26,046.76

Expenditure

Raw Materials 4,766.44 5,762.42 6,063.53 8,568.71 8,356.45

Power & Fuel Cost 897.57 1,027.84 1,038.77 1,222.48 1,383.44

Employee Cost 1,351.51 1,454.83 1,589.77 2,305.81 2,361.48

Other Manufacturing
Expenses 1,466.83 1,561.40 1,654.96 2,127.48 2,419.89

70
Selling and Admin
Expenses 255.93 244.92 247.77 400.24 417.9

Miscellaneous
Expenses 727.12 805.99 1,029.30 1,180.08 1,287.04

Preoperative Exp
Capitalised -112.62 -236.02 -175.5 -343.65 -326.11

Total Expenses 9,352.78 10,621.38 11,448.60 15,461.15 15,900.09

Operating Profit 5,884.22 6,913.75 8,244.54 9,176.44 8,905.59

PBDIT 6,136.80 7,275.87 8,830.95 9,779.51 10,146.67

Interest 168.44 251.25 929.03 1,489.50 1,848.19

PBDT 5,968.36 7,024.62 7,901.92 8,290.01 8,298.48

Depreciation 775.1 819.29 834.61 973.4 1,083.18

Other Written Off 0 0 0 0 0

Profit Before Tax 5,193.26 6,205.33 7,067.31 7,316.61 7,215.30

Extra-ordinary items 47.5 57.29 0 0 0

PBT (Post Extra-ord

Items) 5,240.76 6,262.62 7,067.31 7,316.61 7,215.30

Tax 1,734.38 2,040.47 2,380.28 2,114.87 2,168.50

Reported Net Profit 3,506.38 4,222.15 4,687.03 5,201.74 5,046.80

Total Value Addition 4,586.34 4,858.96 5,385.07 6,892.44 7,543.64

Preference Dividend 0 0 22.19 109.45 45.88

Equity Dividend 719.51 943.91 1,168.93 1,168.95 709.77

71
Corporate Dividend
Tax 100.92 160.42 202.43 214.1 122.8

Per share data (annualized)

Shares in issue (lakhs) 5,534.73 5,804.73 7,305.84 7,305.92 8,872.14
Earning Per Share
(Rs) 63.35 72.74 63.85 69.7 56.37
Equity Dividend (%) 130 155 160 160 80
Book Value (Rs) 176.26 240.31 298.78 331.68 418.94

CHAPTER VI

FINDINGS, SUGGESTIONS & CONCLUSION

72
FINDINGS

With 130 M&A transactions amounting to 54,406 Crore rupees, the country continued
to be an attractive market for mergers & acquisitions. India’s M&A market, which
rebounded rapidly last year after its fall in 2008-2009, could potentially set a new
record in 2011. Inbound deals would be driven by India’s strong fundamentals and
robust economy – especially in the Financials and industrial sectors. Meanwhile,
acquisitive Indian companies would look beyond their traditional target geographies
of the US and Europe to seek deals in Africa, Latin America and closer to home such
as in Bangladesh and Sri Lanka. Outbound deals would be driven by a need to secure
raw materials as well as a desire to diversify,” said Anjali Naik, Deputy Editor at
mergermarket.

M&A deals in the Financial sector topped the table with 28 deals closely followed by
Industrial Sector with 27 deals. Adani Enterprises Ltd.’s acquisition of Adani
Infrastructure Services Private Limited is the India’s largest announced deal of the
year. Rothschild topped the financial adviser league tables and legal adviser leagues
table was dominated by AZB & Partners.

RIL-RPL Merger

The deal is believed to be a win-win situation for both companies, as RIL will have
improved Cash-flow, stronger Balance Sheet and lower cost of capital post merger.
For RPL shareholders, the merger is expected to reduce Earnings volatility and allows
them to participate in RIL's full energy value chain. Both the companies have lots of
benefit and synergy between each other. The merger will unlock significant
operational and financial synergies that exist between RIL and RPL. It creates a
platform for value-enhancing growth and reinforces RIL’s position as an integrated
global energy company.

73
The merger will enhance value for shareholders of both companies. The merger is
EPS accretive for RIL. Through this merger, RIL consolidates a world-class, complex
refinery with minimal residual project risk, while complementing RIL’s product
range. There will be further gains from reduced operating costs arising from synergies
of a combined operation.

Though, cannot be attributed completely to the RIL-RPL merger, the turnover, profit
after tax, Net Worth and Market Capitalization have increased gradually after the
merger. But, Earnings per Share has been falling drastically for two years
continuously after the merger. Earnings per Share of RIL have decreased from nearly
Rs. 134 to Rs.50 per share. Book Value of the company increased from Rs.542.74 in
2008 to Rs.727.66 in 2009, but again dropped to 392.51 in 2010.

The fall in EPS and Book Values of the company can be because of the global melt
down immediately after the merger and huge fluctuations in the oil prices during this
period. The overall performance of the company seems to be satisfactory and the
stakeholders can expect positive results in the coming years.

74
 SUGGESTIONS

a) The companies going for mergers & acquisitions should ensure that they
are not paying excessive Premium in a desperate bid. More you pay for a
company, the harder you will have to work to make it worthwhile for your
shareholders. When the price paid is too much, how well the deal may be
executed, the deal may not create value.

b) Companies going for mergers and acquisitions should take the size issues
into consideration: A mismatch in the size between acquirer and target has
been found to lead to poor acquisition performance.

c) Companies going for a merger or acquisition should do a thorough

research and due diligence: A carelessly carried out research about the
acquisition causes the destruction of acquirer’s wealth. Lack of due diligence
is lack of detailed analysis of all important features like finance, management
capability, physical assets as well as intangible assets and results in failure.

d) Companies going for M&A should ensure that they have the capability to
manage the diversification post merger: Unrelated diversification has been
associated with lower financial performance, lower capital productivity and
higher degree of variance in performance for a variety of reasons including a
lack of industry or geographic knowledge, a lack of focus as well as perceived
inability to gain meaningful synergies.

e) Companies going M&A should make sure that the counter party is a
perfect cultural fit: Without it, the chances are great that Amalgamation and
Acquisition will quickly amount to misunderstanding, confusion and conflict.

75
f) Companies going M&A should make sure that the counter party is a
perfect strategic fit. Many a time lack of strategic fit between two
amalgamated companies especially lack of synergies results in Amalgamation
failure.
g) Companies going for M&A should not do faulty evaluation: If companies
make a wrong assessment of the benefits from the acquisition, they land up
paying a higher price.

h) Companies going for M&A should manage the integration with due care:
The key variable for success is managing the company better after the
acquisition than it was managed before. Even good deals fail if they are poorly
managed after the Amalgamation.

i) Companies going for M&A should Set up the right Pace for Integration:
Delay in integration leads to delay in product shipment, development and
slowdown in the company’s road map. The speed of integration is extremely
important because uncertainty and ambiguity for longer periods destabilizes
the normal organizational life.

j) Companies going for M&A should get the figures audited: It would be
serious mistake if the takeovers were concluded without a proper audit of
financial affairs of the target company. Many a times the acquirer is mislead
by window-dressed accounts of the target.

76
CONCLUSION

Mergers and Acquisition have become very popular over the years especially during
the last two decades owing to rapid changes that have taken place in the business
environment. Business firms are now facing increased competition not only from
firms within the country but also from international business giants thanks to
globalization, liberalization, technological changes, etc. Generally the objective of
Mergers and Acquisitions is wealth maximization of shareholders by seeking gains in
terms of synergy, economies of scale, better financial and marketing advantages,
diversification and reduced earnings volatility, improved inventory management
increase in domestic market share and also to capture fast growing international
markets abroad. But astonishingly, though the number and value of Mergers and
Acquisitions are growing rapidly, the results of the studies on the impact of Mergers
on the performance from the acquirers share holders perspective have been highly
disappointing. This is because making the M & A work successfully is not that easy
as here we are not only just putting the two organizations together but also integrating
people of two organizations with different cultures, attitudes and mindsets.

Meticulous M & A planning including conducting proper due diligence, effective

communication during the integration, committed and competent leadership, speed
with which the integration plan is integrated all this pave for the success of Mergers
and Acquisitions. While making the Merger deals, it is necessary not only to make
analysis of the financial aspects of the acquiring firm but also the cultural and people
issues of both the concerns for proper post-acquisition integration.

77
LIMITATIONS OF THE STUDY

Though the project is completed successfully a few limitations may be

there.

 Since the procedure and policies of the company will not allow
disclosing confidential financial information, the project has to be
completed with the available data given to us.

 The period of study that is 6 weeks is not enough to conduct detailed

study of the project.

 The study is carried basing on the information and documents

provided by the Organization and based on the interaction with the
various employees.

78
BIBLIOGRAPHY

Books: -

Merger, Acquisition and corporate restructuring in India (Rachna Jawa)

Financial Services (M.Y.Khan)

Websites: www.google.com
www.investleaf.com
www.businessweek.com
www.moneycontrol.com
www.ril.com
www.wikipedia.com
www.icicidirect.com
www.mergersindia.com
www.mergerdigest.com

INDEX OF MERGERS AND ACQUISITIONS OF OTHER

COMPANIES:

79
Mergers & Acquisitions In 2010

Transaction
Date Target Value (INRmm) Buyer
12/24/2010 Kimman Exports Private 455.1 Spice Mobility Ltd.
Limited (BSE:517214)
12/24/2010 Eastern Investments Ltd. 3,613.0 Rashtriya Ispat Nigam Ltd.

12/16/2010 Sterling Holiday Resorts 0.236 Bay Capital Investments Ltd.

India Ltd (BSE:523363)
12/13/2010 Chiron Behring Vaccines 1,006.27 Novartis Pharma AG
Private Limited
12/13/2010 Novo Commodities Private 0.588 Novo Group (Catalist:MR8)
Limited
12/13/2010 DCPL Foundries Private 7.0 AIA Engineering Ltd.
Limited (BSE:532683)
12/10/2010 RR Enterprises 137.69 Kuehne & Nagel International
AG (SWX:KNIN)
12/09/2010 Metahelix Life Sciences Pvt. 999.09 Rallis India Limited
Ltd. (BSE:500355)
12/02/2010 Technico Kongsberg 59.94 Kongsberg Automotive Holding
Automotive India Private ASA (OB:KOA)
Ltd.
11/29/2010 AAM Sona Axle Pvt. Ltd. 9.12 AAM International Holdings,
Inc.

11/18/2010 Residency Projects & 12.63 Valuemart Retail (India) Limited

Infratech Ltd.
11/15/2010 IAG Company Ltd. 0.075 Anjaniputra Ispat Limited
(BSE:502241)
11/13/2010 Salil Industries Ltd. 10.17 Gulshan Polyols Ltd.
(BSE:532457)
11/12/2010 Magna Infotech Private 1,006.29 Ikya Human Capital Solutions
Limited Private Limited
11/11/2010 National Stock Exchange of 1,672.0 -
India Ltd.

11/11/2010 SkyGourmet Catering 1,951.33 Gategroup Investments

Private Limited Singapore Pte Ltd.
11/11/2010 Nashik Vintners Pvt Ltd 667.5 Verlinvest S.A.
11/03/2010 Rodon, Inc. 11.12 -
11/02/2010 Runwal CapitaLand India 1,030.14 Runwal Developers Pvt. Ltd.
Private Limited
10/29/2010 Acalmar Oils & Fats 777.53 Adani Wimar Limited
Limited

80
10/25/2010 Parsvnath Estate Developers 1,200.0 Red Fort Capital Advisors Pvt.
Private Limited Ltd.

10/13/2010 Aakarshak Realators Private 238.87 Anant Raj Industries Ltd.

Limited (BSE:515055)
10/11/2010 SE Forge Ltd. 1,834.77 Suzlon Energy Limited
(BSE:532667)
10/11/2010 Candico (I) Limited 500.0 Keventer Agro Limited
10/05/2010 Trump & Gates 56.5 DMC Education Ltd.
(BSE:517973)
10/04/2010 Mipco Seamless Rings 0.72 -
(Gujarat) Ltd.
10/04/2010 Godrej Buildwell Pvt. Ltd 451.27 Motilal Oswal Private Equity
Advisors Private Limited
10/04/2010 Indian Energy Exchange 215.15 -
Limited
09/30/2010 Mipco Seamless Rings 3.97 -
(Gujarat) Ltd.
09/30/2010 Cremica Group 700.0 Motilal Oswal Private Equity
Advisors Private Limited
09/29/2010 Voltaire Leasing & Finance 0.509 -
Ltd.
09/23/2010 Voltaire Leasing & Finance 3.41 -
Ltd.
09/22/2010 Bell Ceramics Ltd. 16.41 Orient Ceramics & Industries
(NSEI:BELCERAMIC) Ltd. (BSE:530365)
09/20/2010 Bell Ceramics Ltd. 1,181.79 Orient Ceramics & Industries
(NSEI:BELCERAMIC) Ltd. (BSE:530365)
09/20/2010 Lloyds Line Pipes Ltd. 400.0 APL Apollo Tubes Ltd
(BSE:590059)
09/17/2010 Nahar Investments and 34.25 Nahar Spinning Mills Ltd.
Holding Ltd (BSE:523391) (BSE:500296)
09/17/2010 Vimal Oil & Food Limited 10.32 -
(BSE:519373)
09/15/2010 AIG Home Finance India 20.0 PCRD Services Pte Ltd
Limited
09/15/2010 National Commodity And 380.62 Shree Renuka Sugars Limited
Derivatives Exchange (BSE:532670)
Limited
09/14/2010 Kale Consultants Ltd. 940.59 Accelya World SL
(NSEI:KALECONSUL)
09/14/2010 Jay Railway Signaling 139.09 KEC International Ltd
Private Limited (BSE:532714)
09/09/2010 Kale Consultants Ltd. 975.15 Accelya World SL
(NSEI:KALECONSUL)
09/03/2010 Gulshan Chemfill Ltd. 0.048 Genus Paper Products Limited
(BSE:532425)
09/03/2010 Woodlands Instruments Pvt. 6.0 Technofab Engineering Limited
Ltd. (BSE:533216)

81
09/03/2010 Jubilant Software Service 810.0 Anant Raj Industries Ltd.
Pvt. Ltd. (BSE:515055)
08/31/2010 Rohini Industrial Electricals 199.7 Voltas Ltd. (BSE:500575)
(P) Ltd.
08/30/2010 EIH Ltd. (BSE:500840) 10,210.0 Reliance Industries Investment
and Holding Private Limited
08/30/2010 ETC Networks Ltd. 1,178.59 Zee Entertainment Enterprises
Ltd. (BSE:505537)
08/30/2010 Zenotech Laboratories 782.44 Daiichi Sankyo Company,
Limited (BSE:532039) Limited (TSE:4568)
08/27/2010 Pro Fin Capital Services Ltd. 5.0 Triyamb Securities Private
(BSE:511557) Limited
08/26/2010 Credit Analysis & Research, 674.8 Religare Enterprise Limited
Ltd. (BSE:532915)
08/26/2010 State Bank Of Indore 195.08 State Bank of India
(BSE:500112)
08/25/2010 Credit Analysis & Research, 750.0 Milestone Religare Investment
Ltd. Advisors; Capstone Capital
Services Pvt Ltd.
08/25/2010 Balaji Ispat Pvt Ltd. 600.0 KKN Group
08/21/2010 Luxury Exports Pvt. Ltd. 733.2 Natraj Financial & Services
Limited (BSE:512047)
08/20/2010 Dr. Lal PathLabs Pvt. Ltd. 1,465.0 TA Associates, Inc.

08/20/2010 Bombay Stock Exchange 1,580.8 TowerBrook Capital Partners

Limited L.P.; Soros Fund Management
LLC
08/13/2010 Power Build Batteries Pvt. 110.0 Time Technoplast Ltd.
Ltd. (BSE:532856)
08/12/2010 Adani Infrastructure 255,269.75 Adani Enterprises Ltd.
Services Private Limited (BSE:512599)
08/11/2010 Wireless-TT Info Services, 14,269.76 Macquarie SBI Infrastructure
Ltd. Management Pte. Ltd.
08/07/2010 GMP Technical Solutions 626.3 Vascon Engineers Ltd
Pvt. Ltd. (NSEI:VASCON)
08/07/2010 GSAL (India) Limited 1,500.0 Steel Exchange India Ltd.
(BSE:590037)
08/05/2010 Zenzy Technocrats Ltd 4.61 Singhal Merchandise (India) Pvt.
Ltd.
07/30/2010 Sparsh BPO Services Ltd. 128.86 Intelenet Global Services Pvt.
(BSE:532833) Ltd.
07/22/2010 Cimmco Ltd (BSE:505230) 19.07 -

07/22/2010 Esaar India Ltd 2.98 -

(BSE:531502)
07/21/2010 Everonn Education Limited 51.95 SKIL Infrastructure Limited
(BSE:532876)

82
07/21/2010 Mohan Goldwater Breweries 140.0 -
(Private) Limited

07/19/2010 Premier Capital Services 40.56 -

Limited (BSE:511016)
07/17/2010 Karen's Gourmet Kitchen 5.74 Temptation Foods Ltd.
Private Limited (BSE:519228)
07/16/2010 Solectron EMS India 315.73 Centum Electronics Ltd.
Limited (BSE:517544)
07/15/2010 Munjal Showa Limited 12.6 Dayanand Munjal Investment
(BSE:520043) Pvt. Ltd

07/14/2010 Hemavathy Power and Light 1,547.69 Greenko Group PLC

Private Limited (AIM:GKO)
07/14/2010 SOBO Central 6,000.0 Indiareit fund Advisors Pvt. Ltd
07/13/2010 Piramal Diagnostic Services 6,000.0 Super Religare Laboratories
Pvt. Ltd. Limited
07/13/2010 Monotype India Ltd. 14.46 Prism Impex Pvt. Ltd.

07/12/2010 Aria Hotels and Consultancy 800.0 IL&FS Investment Managers

Services Private Limited Limited (BSE:511208)

07/11/2010 Hathway Cable & Datacom 264.0 Exide Industries Ltd.

Ltd. (BSE:533162) (BSE:500086)

07/09/2010 ABC Paper Limited 200.43 Esteem Finventures Limited

(BSE:532937)
07/09/2010 Explicit Finance Ltd. 1.1 -
(BSE:530571)
07/08/2010 Pace Marketing Specialities 193.35 Jubilant Life Sciences Ltd.
Ltd. (BSE:530019)
07/08/2010 Ocean Sparkle Limited 517.64 Eredene Capital PLC
(AIM:ERE)
07/08/2010 Potential Service 9.24 Revathi Equipment Ltd.
Consultants Private Limited (BSE:505368)

07/06/2010 Jord Engineers India Ltd. 5.7 3a Capital Services Limited

07/05/2010 Bharat Wire Ropes Ltd. 2,000.0 -
07/04/2010 Reliance Natural Resources 71,510.7 Reliance Power Limited
Ltd. (BSE:532939)

06/29/2010 Eastern Condiments Pvt Ltd. 1,673.1 McCormick & Co. Inc.
(NYSE:MKC)
06/29/2010 Suchitra Finance & Trading 6.75 Marigold Investrade Private
Co Ltd. Limited
06/26/2010 Suchitra Finance & Trading 56.26 Marigold Investrade Private
Co Ltd. Limited

06/22/2010 DB Hospitality Pvt., Ltd. 1,005.07 -

83
06/12/2010 SpiceJet Ltd. (BSE:500285) 7,395.75 Kal Airways Private Limited

06/11/2010 Mining And Allied 2,000.0 BEML Limited (BSE:500048);

Machinery Corporation Ltd. Coal India Ltd. (BSE:533278);
Damodar Valley Corporation
06/09/2010 Shakti Met-Dor Ltd. 188.3 -
(BSE:526510)
05/31/2010 AGC Networks Ltd 779.98 Essar Capital Finance Pvt. Ltd.;
(BSE:500463) Essar Service Holdings Ltd.
05/30/2010 AGC Networks Ltd 2,061.92 Essar Capital Finance Pvt. Ltd.;
(BSE:500463) Essar Service Holdings Ltd.

05/29/2010 Moonlite Technochem Pvt. 27.63 Vikas GlobalOne Limited

Ltd. (BSE:530961)
05/28/2010 Areva T&D India Limited 858.44 ALSTOM Sextant 5 SAS
(BSE:522275)
05/18/2010 Bank Of Rajasthan Ltd. 30,847.89 ICICI Bank Ltd. (BSE:532174)

05/17/2010 ABB Limited (BSE:500002) 43,659.9 ABB Switzerland Ltd.

05/15/2010 Kidderpore Holdings 466.8 Adinath Builders Private Limited
Limited
05/14/2010 Apte Amalgamations Ltd. 10.71 -

05/13/2010 Eco Recycling Limited, 328.93 Eco Recycling Limited

Prior to Merger with (BSE:530643)
Infotrek Syscom Limited
05/13/2010 Shree Salasar Investments 0.284 -
Ltd
05/11/2010 Kidderpore Holdings 908.31 Adinath Builders Private Limited
Limited
05/10/2010 Shree Salasar Investments 1.51 -
Ltd
05/04/2010 Signet Industries Ltd 34.08 Adroit Industries (India) Limited
(BSE:512131)
04/28/2010 Interlink Petroleum Ltd. 756.79 Sim Siang Choon Ltd.
(BSE:526512) (Catalist:594)
04/28/2010 Signet Industries Ltd 42.88 Adroit Industries (India) Limited
(BSE:512131)
04/25/2010 Parrys Sugar Industries Ltd 6,062.3 E.I.D Parry (India) Limited
(BSE:500162) (BSE:500125)
04/25/2010 Parrys Sugar Industries Ltd 269.21 E.I.D Parry (India) Limited
(BSE:500162) (BSE:500125)
04/10/2010 Techtran Polylenses Ltd. 0.175 Credence Infrastructure Ltd
(BSE:523455)
04/09/2010 Techtran Polylenses Ltd. 34.74 Credence Infrastructure Ltd
(BSE:523455)
04/07/2010 Howard Hotels Ltd. 21.98 Mittal Fragrances Pvt. Ltd.;
(BSE:526761) Rishi Real Estates India Private

84
 Limited

04/02/2010 Vybra Automet Ltd. 14.66 -

(BSE:520003)
03/31/2010 Kaashyap Technologies 35.75 Taib Securities Mauritius
Limited (BSE:532283) Limited
03/31/2010 Chamak Holdings Limited 0.905 -
03/27/2010 Sanjay Leasing Ltd. 0.409 -
(BSE:508954)
03/26/2010 Weizmann Forex Limited 168.7 Weizmann
(NSEI:WEIZMANIND)
03/25/2010 Sanjay Leasing Ltd. 3.19 -
(BSE:508954)
03/23/2010 Djs Stock & Shares Ltd 0.072 B.K. Dyeing & Printing Mills
(BSE:511636) Private Limited; Sriman Stocks
Managements Private Limited;
Malar Share Shoppe Limited
03/18/2010 Golden Legand Leasing & 0.021 -
Finance Ltd
03/16/2010 VSoft Services Pvt. Ltd. 10.9 DMC Education Ltd.
(BSE:517973)
03/16/2010 Golden Legand Leasing & 3.15 -
Finance Ltd
02/23/2010 Essar Telecom Infrastructure 24,902.89 Transcend Infrastructure Limited
Private Limited
02/16/2010 Alkom Specialty 118.0 Kalpena Industries Limited
Compounds Ltd. (BSE:526409)
02/08/2010 Palm Tech India Limited 1,830.67 Ruchi Soya Industries Ltd.
(BSE:500368)

02/02/2010 Vallabh Poly-Plast 0.016 -

International Limited
(BSE:530403)
01/28/2010 Vallabh Poly-Plast 11.67 -
International Limited
(BSE:530403)
01/28/2010 Standard Electricals Limited 12,340.97 Havells India Ltd. (BSE:517354)

01/27/2010 Anagram Capital Ltd. 1,640.0 Edelweiss Securities Ltd.;

Edelweiss Investments &
Finance Limited

85