Article: Short-term impact of merger and acquisition on shareholders' return in Indian financial service sector: the role of deal type and percentage of ownership acquired Journal: Afro-Asian Journal of Finance and Accounting (AAJFA) 2026 Vol.16 No.3 pp.345 - 368 Abstract: This study analyses the short-run impact of merger and acquisition (M&A) announcements on the stock returns of acquirer companies in the Indian financial service sector. Further, disaggregated analysis is also conducted to assess the impact of deal-specific factors such as the deal type (domestic vs. cross-border) and percentage of ownership acquired (minority vs. majority) on stock prices. The sample of the study comprised 338 completed M&A deals in the Indian financial service sector from 1st January 2001 to 31st December 2023. The results of the event study methodology showed the positive impact of M&A announcements on shareholders' returns as the stock market experienced 0.51% positive and significant abnormal gains on the event day. The disaggregated analysis indicated that domestic M&A generated higher shareholders' returns than cross-border deals. The Indian acquirer firms in the financial service sector yielded greater stock returns in the case of majority vis-à-vis minority M&A deals. These results are recommended to investors and stock market participants to formulate investment policies and strategies. This research draws the attention of managers to prefer M&A deals as an option to strengthen their competitiveness. Inderscience Publishers - linking academia, business and industry through research

Title: Short-term impact of merger and acquisition on shareholders' return in Indian financial service sector: the role of deal type and percentage of ownership acquired

Authors: Kajal Mittal; Sandeep Singh Virdi; Inu Kumari

Addresses: Department of Commerce, Government Bikram College of Commerce, Patiala, Punjab, India ' School of Management Studies, Punjabi University, Patiala, Punjab, India ' School of Liberal Arts and Management, DIT University, Dehradun, India

Abstract: This study analyses the short-run impact of merger and acquisition (M&A) announcements on the stock returns of acquirer companies in the Indian financial service sector. Further, disaggregated analysis is also conducted to assess the impact of deal-specific factors such as the deal type (domestic vs. cross-border) and percentage of ownership acquired (minority vs. majority) on stock prices. The sample of the study comprised 338 completed M&A deals in the Indian financial service sector from 1st January 2001 to 31st December 2023. The results of the event study methodology showed the positive impact of M&A announcements on shareholders' returns as the stock market experienced 0.51% positive and significant abnormal gains on the event day. The disaggregated analysis indicated that domestic M&A generated higher shareholders' returns than cross-border deals. The Indian acquirer firms in the financial service sector yielded greater stock returns in the case of majority vis-à-vis minority M&A deals. These results are recommended to investors and stock market participants to formulate investment policies and strategies. This research draws the attention of managers to prefer M&A deals as an option to strengthen their competitiveness.

Keywords: mergers and acquisitions; financial service sector; shareholders' return; ownership acquired; event study; India.

DOI: 10.1504/AAJFA.2026.153553

Afro-Asian Journal of Finance and Accounting, 2026 Vol.16 No.3, pp.345 - 368

Received: 11 Apr 2024
Accepted: 01 Oct 2024
Published online: 14 May 2026 *

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Title: Short-term impact of merger and acquisition on shareholders' return in Indian financial service sector: the role of deal type and percentage of ownership acquired

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