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1. 2012 2nd International Conference on Economics and Finance research
Significance of Nifty Index: Mergers in India
PARTHA SEN: Q00020
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2. Correlation: 0.871 and significant
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Significance of Nifty Index: Mergers in India 2

3. MOTIVATION
•Cash and stock have different effect in mergers for acquirer and target(Kropf,
Robinson and Viswanathan, 2003).
•Index of stock price, change of GNP, prime rate of interest are important for mergers
(Shughart and Tollison, 1984).
•Market valuation and merger activity have positive correlation (Martin, 1996 and
Verter, 2002)
•Good market condition can lead to increase the number of deals(Shleifer & Vishny,
2003).
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4. Fraction of merger deals
Deal value NIFTY Value
in shares
NIFTY return
Deal value Fraction of stock
deal
NIFTY return
Number of
deals
Number of
deals
March NIFTY
Value and return
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Significance of Nifty Index: Mergers in India
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5. Hypothesis Testing-1
Null: Merger deals in shares in any month is dependent
to deal value, NIFTY value and NIFTY return
Sum of Squares Mean Square F Sig.
1 Regression 84.492 28.164 3.279 .024
Residual 824.508 8.589
Total 909.000
Deals in stocks as decision of payment in mergers of Indian companies is highly
dependent to deal value, NIFTY value and return.
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Significance of Nifty Index: Mergers in India
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6. Hypothesis Testing-2
Null: NIFTY return has no effect in change in number of deals
Change in number of deals NIFTY return
Observations 100 100
Df 100
t Stat -1.718
P(T<=t) 0.044
Null hypothesis is rejected in 95% confidence level.
This can help to prove that NIFTY return has positive
effect in change in number of deals.
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7. Hypothesis Testing-3
Null: NIFTY return has no effect in change in deal value.
Change in deal value NIFTY return
Observations 100 100
t Stat -1.869
P(T<=t) 0.032
Using t-test null hypothesis can be rejected. Hence
NIFTY return has positive effect on merger deal value.
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Significance of Nifty Index: Mergers in India 7

8. Hypothesis Testing-4
Null: NIFTY return has no effect in change in stock deal.
NIFTY
Change in number of stock deals Return
Observations 100 100
t Stat -1.871
P(T<=t) 0.032
Using t stat null hypothesis can be rejected or
Nifty return has positive effect on change in number
of stock deals positively in 95% confidence level.
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9. Regression analysis
Sum of Squares Mean Square F Sig.
Regression
226163.657 7397.204 25.401 0.000
Residual
58900.783 684.893
Total
285064.440
Predictors:
Dec, NIFTY value, Mar, May, Nov, Oct, Feb, Jan, Apr, NIFTY return, Aug, Sep, Jun
Dependent Variable:
Deal number a
Coe fficients
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) -13.470 9.721 -1.386 .169
NIFTY value .032 .002 .862 17.502 .000
NIFTY return .872 .389 .120 2.241 .028
Jan 21.694 12.920 .110 1.679 .097
Feb 10.209 12.735 .052 .802 .425
Mar 26.397 12.848 .134 2.055 .043
Apr 3.785 12.782 .019 .296 .768
May 2.595 12.806 .013 .203 .840
Jun 11.983 12.358 .064 .970 .335
Aug -3.484 12.347 -.019 -.282 .779
Sep 15.315 12.340 .082 1.241 .218
Oct 12.266 12.728 .062 .964 .338
Nov -2.355 12.792 -.012 -.184 .854
Dec 5.470 12.873 .028 .425 .672
a. Dependent Variable: 5/29/2012 11:45:25
Deal number PM
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10. Significance of Nifty Index: Mergers in
India
THANKS
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