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VOL. 12, ISSUE 1 (2026)
Stock market reaction to mergers and acquisitions: An event study of Indian listed firms
Authors
Dr. Shravani
Abstract
The current study inspects a sample of 69 mergers & acquisition announcements in the Indian
manufacturing industry in the period of 2015–2025 to determine the impact of
mergers & acquisition announcements on company stock returns. The study
used the event study methodology of the market and market-adjusted models to
calculate the excess returns, AAR, and CAAR of the company’s stock returns over
various event periods. During the study period, the study found that not less
than 60% of Indian manufacturing companies have positive abnormal returns under
both models. According to the market model, before M&A announcements, there
is a decreasing AAR with a decreasing event period of -40 days to the date of
the Announcement, followed by an increasing AAR with an increasing event window
of 1 to +40, and there is no substantial difference in CAAR between before- and
after-announcements of mergers & acquisition in the event window of (-40 to
-1 day) and (+40 to +1 day). In the market-adjusted model, on event day and 2
days post the Announcement, has a positive and significant AAR. In the event
window of (-40 to -1 day) and (+40 to +1 day), it is observed that CAAR is
higher in the post-announcement of M&A (10.6%) than the pre-announcement of
M&A (1.9%). Finally, the study concludes that the CAAR of the market model
is substantially greater than that of the market-adjusted model in the pre-and
post-announcements of M&A.
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Pages:289-295
How to cite this article:
Dr. Shravani "Stock market reaction to mergers and acquisitions: An event study of Indian listed firms". International Journal of Commerce and Management Research, Vol 12, Issue 1, 2026, Pages 289-295
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