IMPACT OF OWNERSHIP STRUCTURE AND PROFITABILITY OF ACQUIRING COMPANIES ON MERGERS AND ACQUISITIONS DECISION IN INDIA: AN EMPIRICAL ANALYSIS OF BSE-LISTED COMPANIES (2001-2023)

This study examines the impact of ownership structures—particularly promoter-led versus non-promoter-led firms—on mergers and acquisitions (M&A) activity among companies listed on the Bombay Stock Exchange (BSE) between 2001 and 2023. Using a purposive sample of 363 completed M&A transactions selected from a larger pool of 2,816 deals, the study focuses on firms with complete data regarding ownership, transaction details, and financial disclosures. Transactions from the financial sector were excluded due to their unique regulatory context. The analysis reveals that promoter-led firms accounted for 61.43% of total M&A activity, indicating their dominant role in shaping corporate consolidation strategies in India. These firms were especially active in the manufacturing and services sectors. In contrast, non-promoter-led firms showed greater participation in capital-intensive and high-growth sectors such as IT, pharmaceuticals, and automobiles. Further, the study finds that mid-sized firms (with assets between ₹1,001 crore and ₹10,000 crore) were the most active in M&A, representing 44.90% of the sample, followed by large firms. A classification of merger types shows horizontal mergers as the most prevalent, particularly among promoter-led firms. Two paired-sample t-tests were conducted to statistically assess differences in M&A activity by ownership type. Results indicate significant differences in both sector-wise and industry-wise M&A activity, affirming that promoter-led firms are more actively engaged in acquisitions. The study also distinguishes between Indian and foreign promoters, with Indian promoters accounting for a higher number of deals and larger average shareholding. These findings offer new insights into how ownership structures and firm size influence M&A decisions in emerging markets like India. The results have practical implications for policymakers, investors, and corporate strategists aiming to navigate India’s evolving M&A landscape. Keywords: Mergers and Acquisitions, Ownership Structure, Promoters, Non-Promoters, Profitability