Mergers and acquisition will be now new step in takeover marriages of two different but
allied corporate companies on Indian Business scenario, due to global recession. It is
necessity of both companies to come, unite & amalgamate for mutual survival and
benefit to boost the turnover. It is also a boon to investors and shareholders of both
Here I take pleasure to present my project study on recent merger of HLL & Ponds (I)
Ltd. as a case study because this amalgamation of two giant corporate companies have
shown significant growth in sales turnover compared to their previous singular existence
two years back.
Two years successful joint involvement proves their mutual unification for their
committed goals. This can be example and lesson for other merger aspirant companies
and it has also set a milestone for collapsing or shaking industries. On the background
of ‘liquidity Crunch’, it is oxygen. It is also catalyst to enhance and accelerate the mutual
growth. Indian business atmosphere should welcome this promontory strategy.
In this study you will find miraculous transfer of seen from before to aftermath of
merging. Here I have elaborated the wide effect on joint range of products of both
companies, increase in sales figures and increase in their sales value. It is a productivity
analysis of the merger between HLL and PIL.
I observed the factors they consider, to get merge with each other. What was the
objective behind this merge? Have all the shareholders and creditors approved this
merge? What procedures took place at the time of merge? & What was the fruit of
After observing all the data collected, I came to conclusion that, this merger was really
fruitful for both companies & mutually beneficial.
This project on acquisitions and mergers has been selected by me basically out
of the curiosity to know the reasons for which companies go in for acquisitions
and mergers and also about the after effects of the same.
I have focused mainly on HLL and Ponds merger, which took place in March
1998 and had created much furore in the market. This project is an effort to study
how these businesses get attracted to merge with each other’s? What factors
they consider for merging? What is the objective behind such mergers? Is
everyone including shareholders, creditors, employees and others happy with
such mergers? What procedures take place at the time of mergers? & What is
the fruit of such mergers and acquisitions taking place round the globe?
1.2 AIMS AND OBJECTIVES IN DOING THIS PROJECT
The prime motto in doing this project is to know in depth about mergers and
acquisitions and their effects on companies undergoing the same. Also an effort
has been taken to differentiate among mergers and acquisitions. A case study on
the merger between HLL and Ponds has been put to practically understand such
happenings going on in the business world every next day. The objectives of
my study are as under –
1. To find out the reasons for which HLL and PONDS merged with each
2. To learn the external growth of HLL through PONDS merger. i.e. the after
effects of this merger
3. To learn the applications of my knowledge of mergers and acquisitions.
1.3 METHOD OF DATA COLLECTION
I have collected primary data as well as secondary data. I have adopted the
following methodology of study through out the project –
1. I visited Hindustan lever Limited, 165/166-lever house, Back Bay
Reclamation, Mumbai 400 020 several times.
2. I interviewed the top -level executives i.e. finance officer of the company
and collected the primary information about the merger and required data.
3. I telephonically interviewed Mr. Rajprakash who is from Finance
department in HLL Company.
4. Then from websites of HLL as well as some corporate sector websites I
collected some required material regarding legal policies of merger. From
strategic planting’s books I got brief theoretical notes regarding mergers.
5. Data was also collected from secondary sources such as various leading
newspapers, magazines, Internet, TV etc.
1.4 LIMITATIONS IN DOING THIS PROJECT
Certain difficulties were faced by me while doing this project, which became
limitations in the completion of this project.
1. Most of the times in quo with the policy of keeping the data ‘confidential’
HLL refuse to give data in detail.
2. As Ponds India limited Company is in Madras I could not meet any person
from Ponds India Limited, as it was not possible physically to go there.
3. Because of unavailability of main executive officers who were really on the
panel of that merger I could not get appointment of such officers.
The success story of this merger is explained in brief in the project report, which I
had undertaken. I started my data collection work on 2, January 2002. I required
30 days to complete this project. First I started by collecting adequate basic
material from websites. Then I took appointment of HLL financial officers and I
discussed about my project in detail with them and they gave me required
Today’s world is on the urge of industrial growth. No one is standing behind.
Everybody wants to flow off with success. Every one wants value added benefits
Our Indian industry sector is also not behind in this case. I, personally feel that
our country is going to be one good example for other countries. But when I think
about, by what means we can achieve such success I get attracted by our
industrial growth rate, which is hardly below 2%. Instead of thinking on, what
factors are responsible for this slow rate of growth, we have to think upon our
strategy, which we are going to implement. If we are lagging in any case we
always take help of other in somewhat same manner our industries are taking co-
operation in corporate sector for mutual benefits from other companies.
On observation it was found that such business combinations, which may take
forms of mergers, acquisitions, amalgamations and takeovers, are important
features of corporate structural changes. They have played an important role in
external growth also.
2.2 MERGER MANIA
1993 will go down in business almanac as the year in which corporate India
experienced a merger mania. For, freed of the economic shackles that had
chained them for decades, transnationals and big business houses have since
displayed a voracious appetite for parts - or the whole - of their rivals.
The figures speak for themselves. During the '80s the total number of Mergers &
Acquisitions (M&As) that India witnessed was only 84 (32 mergers & 52
takeovers), but in 1993 alone there were 114 M&As. What's more, in the coming
years this figure is bound to rise further. In 1995 there were 426 M&A
announcements, more than half of which are bound to go through. This
translates more than one merger / acquisition every three days.
To be sure, this is by no means the first time that the M & A game are being
played in recent times. The first wave was between 1977 & 1985, kicked off by
the imposition of FERA & the industrial license-permit raj. The second wave
began in 1989-90, triggered off by the first changes of liberalization. This time
round, the difference is that the game is no longer dominated by a single player.
Firms and businessmen, small & large, low profile & high profile, Indian & foreign
are into M & A. The time is not far off when M&A will become the mainstay of
2.3 FACTORS WHICH GAVE A SUDDEN IMPETUS TO M & A
The main reasons for the sudden impetus to M&A in India are the deshackling of
the restrictive provisions of various laws & regulations like the MRTP Act, FERA,
Industrial Licensing Policy, etc. Moreover, in a protected economy, there was
little incentive to contemplate acquisitions, hog limelight & get into complicated
legal & financial problems. The entry of multinationals and the integration of India
into the global market has also made it necessary for Indian corporates to own
companies of a truly global scale for the sake of economies. Divestures and sell-
offs, earlier considered a sign of failure, are also becoming commonplace as
organizations learn to focus on core competence.
3.1 DESCRIPTION OF THE TERMS MERGER / AMALGAMATION AND
ACQUISITION / TAKEOVERS
Merger means combination of two or more companies wherein only one
company survives and others cease to exist. The merger takes place for a
consideration, which the acquiring company either pays in cash or by offering its
shares. The survivor acquires the assets as well as liabilities of the merged
company or companies. Thus combination of two or more firms is known as
merger. It may be brought about in two ways -
1. Acquisition of one business unit by another or,
2. Creation of a new company by complete consolidation of two or more units.
Ordinarily, amalgamation means merger. Amalgamation can be described as a
blending of two or more existing undertakings into one undertaking. The
shareholders of each blending company which is to carry on the blended
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. An acquisition may be affected by -
1. Agreement with the persons holding majority interests in the company
management like members of the board or major shareholders commanding
majority of voting power.
2. Purchase of shares in open market.
3. To make takeover offer to the general body of shareholders.
4. Purchase of new shares by private treaty.
5. Acquisition of share capital of one company may be by either all or one of the
following forms of consideration viz. Means of cash, issuance of loan capital
or insurance of share capital.
A takeover is acquisition and both the terms are used interchangeably. Takeover
differs from merger in approach to business combination. Transactions involved
in takeover, determination of the share exchange or cash price and the fulfillment
of goals of combination all are different in takeovers than in mergers.
3.2 MAJOR POINTS OF DISTINCTION BETWEEN MERGERS AND
ACQUISITION ARE AS FOLLOWS
Target company disappears Target company continues
Consideration is exchange of shares Consideration can be exchange of
shares or cash or both
No more tax implications Usually tax liability
No sales tax implications Sales tax implication
No out flow of funds by acquiring
Outflows of funds may take place
Cannot acquire part Can acquire part
3.3 TYPES OF MERGERS
The basis for classification of mergers is the business in which the companies
are involved. Different motives underlie different types of mergers. Different types
of mergers are –
1. HORIZONTAL MERGER
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 main motives behind this are to obtain economies of scale in production by
eliminating duplication of facilities and operations, elimination of competition,
increase in market segments and exercise of better control over the market.
There is little evidence to dispute the claim that properly executed horizontal
mergers lead to a significant reduction in costs. A horizontal merger brings about
all the benefits that accrue with an increase in the scale of operations. Apart from
the cost reduction it also helps firms in industries like pharmaceuticals, cars, etc
where huge amounts are spent on R&D to achieve a critical mass and reduce
unit development costs.
2. VERTICAL MERGER
It is a merger of one company with another, which is involved, in a different stage
of the production and/or distribution process thus espousing backward integration
to assimilate the sources of supply and/or forward integration towards market
outlets. The main motives are to ensure ready take off of the materials, gain
control over product specifications, increase profitability by gaining the margins of
the previous supplier/distributor, gain control over scarce raw material supplies
and in some cases to avoid sales tax.
3. CONGLOMERATE MERGER
It is an amalgamation of two companies engaged in unrelated industries. The
motive is to ensure a better utilization of financial resources, enlarge debt
capacity, and to reduce risk by diversification.
Conglomerate merger has evinced particular interest among researchers
because of the general curiosity about the nature of gains arising out of them.
Economic gain arising out of a conglomerate merger is not clear. Much of the
traditional analysis relating to economies of scale in production, research,
distribution and management is not relevant for conglomerates. The argument in
its favour is that inspite of the absence of economies of scale and
complimentaries, they may cause stabilization in profit stream.
4. CONCENTRIC MERGER
This is a mild form of conglomeration. It is the merger of one company with
another which is engaged in the production / marketing of an allied product.
Concentric merger is also called product extension merger. In such a merger, in
addition to the transfer of general management skills, there is also a transfer of
specific management skills, as in production, research, marketing, etc, which
have been hitherto used in a different line of business. A concentric merger
brings all the advantages of conglomeration without the side effects i.e. with a
concentric merger it is possible to reduce risk without venturing into areas that
the management is not competent in.
5. CONSOLIDATION MERGER
It involves a merger of a subsidiary company with its parent. Reasons behind
such a mergers are to stabilize cash flows & to make funds available for the
In consolidation economic gain is not readily apparent because the merging firms
are under the same management even before the merger. Still the flow of funds
between a parent & the subsidiary is obstructed by a lot of other considerations
like taxation, etc. Therefore, consolidation can smoothen cash flows and also
make it easier to infuse funds for the revival of sick subsidiaries.
3.4 TYPES OF ACQUISITIONS
1. NEGOTIATED / FRIENDLY
This is organized by the incumbent management with a view to part with the
control of management to another group through negotiations. The terms and
conditions of takeover are mutually settled by the groups.
2. OPEN MARKET / HOSTILE
They are also referred to as raid on the company in order to takeover the
management of, or acquire controlling interest in, the target company, a
person /group of persons acquire shares from the open market / financial
institutions/mutual funds/ willing shareholders at a price higher than the prevailing
When a profit earning company takes over a financially sick company it is a bail –
out type of takeover.
3.5 STAGES IN MERGERS & ACQUISITION
The complexity of mergers & acquisitions requires skills, which are not often
needed, in a day-to- day business. A typical merger or acquisition involves the
following stages -
1. Strategic review of opportunities.
2. Target identification and evaluation.
3. Confidential approaches.
4. Tax-efficient financial structuring.
5. Transaction securing and closing.
3.6 ANALYSIS OF MERGERS AND ACQUISITIONS
There are three important steps involved in the analysis of mergers and
The acquiring firm should review its objective of acquisition in the context of its
strengths and weaknesses, and corporate goals. This will help in indicating the
product-market strategies that are appropriate for the company. It will also force
the firm to identify business units that should be dropped and those that should
The planning of acquisition will require the analysis of industry-specific and the
firm-specific information. The acquiring firm will need industry data on market
growth, nature of competition, ease of entry, capital and labour intensity, degree
of regulation etc. About the target firm the information needed will include the
quality of management, market share, size, capital structure, profitability,
production and marketing capabilities etc.
2. SEARCH AND SCREENING
Search focuses on how and where to look for suitable candidates for acquisition.
Screening process short-lists a few candidates from many available.
Detailed information about each of these candidates is obtained.
Merger objectives may include attaining faster growth, improving profitability,
improving managerial effectiveness, gaining market power and leadership,
achieving cost reduction etc. These objectives can be achieved in various ways
rather than through mergers alone. The alternatives to merger include joint
ventures, strategic alliances, elimination of inefficient operations, cost reduction
and productivity improvement, hiring capable managers etc. If merger is
considered as the best alternative, the acquiring firm must satisfy itself that it is
the best available option in terms of its own screening criteria and economically
3. FINANCIAL EVALUATION
Financial evaluation of a merger is needed to determine the earnings and cash
flows, areas of risk, the maximum price payable to the target company and the
best way to finance the merger. The acquiring firm must pay a fair consideration
to the target firm for acquiring its business. In a competitive market situation with
capital market efficiency, the current market value is the correct and fair value of
the target firm. The target firm will not accept any offer below the current market
value of its share. The target firm may, in fact, expect the offer price to be more
than the current market value of its share since it may expect that merger
benefits will accrue to the acquiring firm. A merger is said to be at a premium if it
thinks that it can increase the target firm’s after merger by improving its
operations and due to synergy. It may have to pay premium as an incentive to
the target firm’s shareholders to induce them to sell their shares so that the
acquiring firm is enabled to obtain the control of the target firm.
4.1 MOTIVES AND BENEFITS OF MERGERS
Why do mergers take place? It is believed that mergers and acquisitions are
strategic decisions leading to the maximization of a company’s growth by
enhancing its production and marketing operations. They have become popular
in the recent times because of the enhanced competition, breaking of trade
barriers, free flow of capital across countries and globalization of business as a
number of economies are being deregulated and integrated with other
economies. A number of reasons are attributed for the occurrence of mergers
and acquisitions. For example, in a nutshell it is suggested that mergers and
acquisition are intended to -
1. To attain a higher growth rate than is possible through internal growth
2. To bring about an increase in the price-earnings ratio and market price of
3. To purchase a unit for better use of investible funds;
4. To have quick access to resources already developed by another firm
through R & D and innovative management;
5. To reduce competition by acquiring competing firms and limit competition;
6. To fill the gap in the existing product line;
7. To add new products (diversify) when the existing product has reached
the peak in its life cycle;
8. To secure tax advantage by acquiring other firms with accumulated losses
which can be set off against the current or future profits;
9. To improve the efficiency of operations and attain higher profitability
through potential synergistic effects;
10. Overcome the problem of slow growth and profitability in one’s own
11. Gain economies of scale and increase income with proportionately less
12. Establish a transnational bridgehead without excessive start-up costs to
gain access to a foreign market;
13. Utilize under-utilized resources – human and physical and managerial
skills and market power;
14. Displace existing management;
15. Circumvent government regulations;
16. Create an image of aggressiveness and strategic opportunism, empire
building and to amass vast economic powers for the company.
4.2 ARE THERE ANY REAL BENEFITS OF MERGERS AND ACQUISITIONS?
A number of benefits of mergers are claimed. All of them are not real benefits.
Based on the empirical evidence and the experience of certain companies, the
most common motives and advantages of mergers and acquisitions are
explained below -
1. ACCELERATED GROWTH
Growth is essential for sustaining the viability, dynamism and value enhancing
capability of a company. A growth-oriented company is not only able to attract
the most talented executives but it would also be able to retain them. Growing
operations provide challenges and excitement to the executives as well as
opportunities for their job enrichment and repaid career development. This helps
to increase managerial efficiency. Being the same all other things, growth lead to
higher profits and increase in the shareholders’ value. A company can achieve its
growth objective by -
• Expending its existing markets.
• Entering in new markets.
A Company may expand and/or diversify its markets internally or externally. If the
company cannot grow internally due to lack physical and managerial resources, it
can grow externally by combining its operations with other companies through
mergers and acquisitions. Mergers and acquisitions may help to accelerate the
pace of a company’s growth in a convenient and inexpensive manner.
Internal growth requires that the company should develop its operating facilities-
manufacturing, research; marketing etc. internal development of facilities for
growth also requires time. Thus, lack or inadequacy of resources and time
needed for internal development constraints a company’s pace of growth. The
company can acquire production facilities as well as other resources from outside
through mergers and acquisitions. Specially, for entering in new
products/markets, the company may lack technical skills and may require special
marketing skills and/or a wide distribution network to access different segments
of markets. The company can acquire existing company or companies with
requisite infrastructure and skills and grow quickly. Mergers and acquisitions,
however, involve cost. External growth could be expensive if the company pays
an excessive prince for merger. Benefits should exceed the cost of acquisition for
A growth, which adds value to shareholders - In practice, it has been found that
the management of number of acquiring companies paid an excessive price for
acquisition to satisfy their urge for high growth and large size of their companies.
It is necessary that price may be carefully determined and negotiated so that
merger enhances the value of shareholders.
2. ENHANCED PROFITABILITY
The combination of two or more companies may result in more than the average
profitability due to cost reduction and efficient utilization of resources. This may
happen because of the following reasons -
• Economies of scale
• Operating economies
3. ECONOMIES OF SCALE
Economies of scale arise when increase in the volume of production leads to a
reduction in the cost of production per unit. Merger may help to expand volume
of production without a corresponding increase in fixed costs. Thus, fixed costs
are distributed over a large volume of production causing the unit cost of
production to decline. Economies of scale may also arise from other
indivisibilities such as production facilities, management functions and
management resources and systems. This happens because a given function,
facility or resource is utilized for a larger scale of operation. For example, a given
mix of plant and machinery can produce scale economies when its capacity
utilization is increased. Economies in the use of the marketing function can be
achieved by covering wider markets and customers using a given sales force and
promotion and advertising efforts. Economies of scale may also be obtained
from the optimum utilization of management resource and systems resulting in
economies of scale.
4. REDUCTION IN TAX LIABILITY
In a number of countries, a company is allowed to carry forward its accumulated
loss to set off against it future earnings for calculating its tax liability. A loss
making or sick company may not be in a position to earn sufficient profits in
future to take advantage of the carry forward provision. If it combines with a
profitable company, the combined company can utilize the carry forward loss and
save taxes. In India, a profitable company is allowed to merge with a sick
company to set off against its profits the accumulated loss and unutilized
depreciation of that company. A number of companies in India have merged to
take advantage of this provision.
5. FINANCIAL BENEFITS
There are many ways in which a merger can result into financial synergy and
benefits. A merger may help in -
• Eliminating the financial constraint;
• Deploying surplus cash;
• Enhancing debt capacity;
• Lowering the financial costs.
6. OVERCOME FINANCIAL CONSTRAINTS
A company may be constrained to grow through internal development due to
shortage of funds. The company can grow externally by acquiring another
company by the exchange of shares and thus, realize the financing constraint.
7. SURPLUS CASH
A Cash rich company may face a different situation. It may not have enough
internal opportunities to invest its surplus cash. It may either distribute its surplus
cash to its share holders or use it to acquire some other company. The share
holders may both really benefit much if surplus cash is returned to them since
they would have to pay tax at ordinary income tax rate. Their wealth may
increase through an increase in the market value of their shares if surplus cash is
used to acquire another company. If they sell their shares, they would pay tax at
a lower, capital gains tax rate. The company would also be enabled to keep
surplus funds and grow through acquisition
8. DEBT CAPACITY
A merger of two companies, with fluctuating, but negatively correlated, cash
flows can bring stability of cash flows of the combined company. The stability of
cash flow s reduce the risk of insolvency and enhances the capacity of the new
entity to service a larger amount of debt. The increased borrowing allows a
higher interest tax shield, which adds to the shareholders wealth.
4.3 URGE TO MERGE & ACQUIRE
Following are the apparent reasons why companies are attracted towards
merging & acquiring -
1. BIG IS BEAUTIFUL
From sugar to cement, white goods to pharmaceuticals, the compulsions for
consolidation i.e. to merge & acquire is increasing by the day. And due to the
strict patent regime looming, companies need the critical mass to be able to set-
Consider Pharmaceuticals - 20,000 units with even the market leader having only
a 5% market share.
The Indian Cement Sector comprises hundreds of units. The top 20 players
control 80% in Southeast Asia. Cement prices are dropping fast and the only way
to grow is to get better and faster efficiencies of production and distribution.
2. DESPERATE SELLERS
Even elite business groups are today desperate to sell off non-core businesses
as profitability & margins are under squeeze in every industry.
Tatas exited cosmetics & pharmaceuticals in a fortnight. Raymonds sold off its
steel division to Thyssen of Germany. Voltas is shifting focus from white goods to
engineering & air-conditioning. Indian promoters grew big by gorging on licences,
cheap loans & diversifying madly. They promoted their children as heirs
irrespective of talent. Now many of them have neither the capital, technology nor
managerial skills to cope with the new competitive reality. The downturn is
forcing them to sell peripheral business to raise cash for focus areas.
3. EAGER BUYERS
The concept of replacement cost is fast taking root in the Indian pysche.
Companies are realizing that it is far cheaper to expand by acquiring other
companies in a downturn than by setting up Greenfield projects. Thus any
company with margins superior to the sector average and able to withstand the
recessionary trend is looking for expansion through mergers & acquisitions.
Cement industry- a greenfield project of million tonnes would cost Rs.400 crores
whereas companies with the same capacity can be bought out for Rs.150-200
crores. So it makes sense for Indian Cements to catapult itself to second largest
cement company status by trying to buy other low key players in the same
4. FRESH THINKING
The present day business tycoons realized that being sentimentally attached to
their business does not pay off in the corporate jungle and so, they don't mind
acquiring or merging.
"I am not emotional about any business" says Ajay Piramal, who has built a huge
pharmaceutical business primarily through acquisition.
"It has been a long and highly satisfactorily association…but there is no place for
sentimentality since shareholder's interests are paramount to one's feelings."
said Simone Tata last month as she bid adieu to Lakme.
Now many a new boss like Kumarmangalam Birla is looking to the overseas
acquisition route to grow.
5. TRANSPARENT LAW
Adding to all this is the great facilitator- the takeover code. Now anyone is free to
buy up to 10% of a company's paid up capital. He must make an open offer for at
least 20% more then & if shareholders bite the bait, the company can't block the
transfer of shares and the predator can force the existing management out.
6. DITHERING FIs
The success of M & A strategies is largely dependent on which way the big five -
UTI, LIC, ICICI, IDBI and IFCI swing in a takeover bid. So far there is little
change in their dithering ways.
The Indian Cements Offer -The FIs, as 20% shareholders of Raasi Cements,
have been saying that they would subscribe to the offer, as the price was too
good to be true. But as shareholders of India Cements, they are talking of
blocking the offer, as the price being paid is too high and therefore detrimental
to ICL shareholder's interest. The reasoning is that ICL should have picked up
any other smaller unit for half the price. "It's a classic case of wanting to run with
the hare and hunt with the hound and could blow the whole takeover attempt in
ICL's face, says an investment banker.
7. INCREASES THE MARKET SHARE
It helps to eliminate competition and protect the existing market. Thus the market
share can be enhanced.
When Coca Cola acquired Parle Products it reduced competition thus increasing
its market share.
8. STRENGTHENS THE MARKET POSITION
It helps to strengthen the market position in the following ways –
• By obtaining new market outlets in position of the offeree -
When McLeod Russel (India) Ltd. Merged with Eveready Industries India Ltd.,
`McLeod Russel could use Eveready’s five lakh strong direct retail outlets to
market its product.
• By controlling patents and copyrights -
When pharmaceutical companies like Hoechst, Marion and Russel merged to
form HMR the result was that the patent rights were in control of the single
existing company - the HMR.
4.4 DRAWBACKS OF MERGERS AND ACQUISITIONS
Negative Side Of Merger
However mergers and acquisitions are not always successful. According
to Harry Levinson many mergers have been disappointing with their
results and painful to their participants primarily due to psychological
reasons arising out of the neurotic wish to become big by all means and
because of the condescending attitude of the senior partner towards the
Research studies on the value of mergers have shown that the growth rate
and profitability of the combined organization tend to decline as competed
with the performance of the combining firms. Executives of the acquired firm
often lose their status, authority and even their jobs. From the social point of
view mergers give rise to monopolistic conditions with increased concentration of
economic and political power, higher prices, restricted supply, and other abuses
of monopoly. Some other drawbacks include –
All mergers decrease competition. The resulting oligopoly and monopoly can
lower output and raise prices. While monopolies give rise to economies of scale,
the lower output reduces economic efficiency.
Those who framed India’s industrial policy took the view that the net effect of this
would be a loss in social welfare. For this reason the MRTP act of 1969
contained a lengthy provision to prevent monopolies and by extension, mergers
from coming into being.
Recently there were rumours, that with a large market share assured, Brooke
Bond was dumping low quality tea. This was the consequence of monopoly
power, which was clearly overlooked by the MRTPA amendments. In the soft
drinks market, when Coca-Cola acquired Parle products thus becoming the
monopolist of the market, it increased the prices of the soft drinks in a short span
Take the examples of Hindustan Lever and TOMCO merger, the takeover of
Damania airways by NEPC Airlines, the acquisition of mosquito repellent
products like Goodnight, etc. by the Godrej Group, the recently announced joint
venture between HLL and Lakme, the acquisition spree of the HLL group in ice-
creams (Dollops, Kwality,..), etc. In most of these & many other cases, it is
apparent that large market shares have now been concentrated in the hands of a
single company / group. Questions arise as to the monopolistic practices, which
could arise as a result. It also necessary to consider whether such an extent of
total decontrol is desirable.
2. NO EARNINGS ENHANCEMENT
The factors which drove corporate interest in buying up other firms was none
other than low capital costs, strong cash flows and robust balance sheets in a
low interest rate environment. Unfortunately the cost of financing an acquisition is
neither low in this country nor have the managers been able to produce
something that is earnings enhancing.
3. CULTURE CONFLICT
Cultural integration is a much-misunderstood term. In a majority of companies’
culture tend to be viewed as a single, overarching and immutable entity –
corporate culture. Even in the biggest corporations of the world, it is impossible to
say that there is only one corporate culture.
IBM tried for years to impose its Big Blue culture on its employees. But people
from the same technical background, educational system and social background
doing the same type of job, were doing things differently. Especially, when they
were from different nationalities. Thus the employees of the smaller organisation
are frustrated, as they have to adapt to the alien culture of the dominant
Most management in India particularly the more traditional baggage-laden
organisations, simply ignore this problem till it is too late.
4. INVOLVES LARGE TRANSACTION COST
Large transactional costs are involved in hostile takeovers-resources that are
spent by the Target Company in fending off the bid and by the acquirer too in
pushing through its strategy.
5. TRADE UNION PROBLEMS
One of the major problems in mergers and acquisitions faced by companies is
that when they try to reduce the work force, the trade union of all the involved
Trade Union filed a case against HMR on technical grounds.
5.1 GUIDELINES FOR EFFECTIVE MERGERS
Mergers and acquisitions involve a complex set of decisions to be made as
regards financial arrangements, organizational changes and adjustments of
different kinds. On the basis of his own experience with mergers, an American
executive has suggested the following guidelines for carrying through the
process of merger or acquisition effectively -
1. Specify clearly the merger objectives, especially earnings objectives;
2. Work out and specify the gains of shareholders of both the combining
3. Be sure that the management of the acquired company is or can be made
4. Note the existence of important dovetailing resources but do not expect
5. Initiate the process of merger with active involvement of the chief executive;
6. Clearly define the business that the company is in;
7. Identify and check on the strengths, weaknesses and key performance
factors for both the combining units;
8. Anticipate problems and discuss them early with the other company so as to
create a climate of trust;
9. Be sure that the merger does not pose a threat to the present management
10. People should be of prime consideration in planning for merger and
structuring the organization.
5.2 LEGAL & PROCEDURAL ASPECT OF MERGER
The procedure of amalgamation or merger is long-drawn and involves some
important legal dimensions. Following steps are taken into procedure -
1. Analysis of proposal by the companies -
Whenever the proposal of amalgamation or merger comes up the
management of the concern companies looks in pros and cons of the
scheme. The likely benefits such as economies of scale, operational
economies, improvement in efficiency, reduction in costs, benefits of mergers
etc are clearly evaluated. The likely reactions of shareholders, creditors and
others are also assessed. The taxation implication is also studied. After going
through whole analysis work, it is seen the whole scheme s beneficial or not.
It is perused further only if it will benefit the interested parties otherwise the
scheme is shelved.
2. Determining exchange ratio -
The amalgamation or merger schemes involve exchange of shares. The
shareholders of amalgamated companies are given shares of amalgamated
companies. It is very important that the rational ratio of exchange of share
should be decided. Normally a number of factors like book value per share,
potential earnings, value of assets are taken over are considered for
determining exchange ratios.
3. Approval of board of directors -
After discussing amalgamation scheme throughly and negotiating the
exchange ratio, it is put before the respective board of directors for approval
4. Approval of shareholder –
After the approval of scheme by the respected BOD, it must be put before
the shareholders. According to section 391 of Indian Companies Act, the
amalgamation scheme should be approved at the meeting of the members or
class of the members, as the case may be, of the respected companies
representing three-fourth of value and majority of numbers, whether present
in person or by proxies. In case the scheme involves the exchange of shares
it is necessary that is approved by not less than 90% of the share holders (in
value) of the transferor company to deal effective with the dissenting
5. Consideration of the interest of the creditors –
The views of creditors should also be taken into consideration. According to
section 391, amalgamation scheme should be approved by majority of
creditors in numbers and value.
6. Approval of the court -
After getting the scheme approved, an application of scheme should be filed in
the court for its sanction. The court will consider the viewpoints of all parties
appearing, it any, before it, before giving its consent. It will see that the interest
of all parties are protected amalgamation scheme and pass orders accordingly.
However, it is up to shareholder, whether to accept the modified scheme or not.
It may be noted that no scheme of amalgamation can go through unless the
registrar of companies send the report to court to the effect that the affairs of
the company have not been conducted as to be prejudicial to the interest of its
members or to the public interest.
7. Clearance under MRTP Act –
Every scheme of amalgamation or merger requires the court government
under MRTP Act. The idea behind is that to see that it does not result in control,
ownership & management of important undertakings into a few hands, which is
not likely to be in public interest. The government does not allow any scheme of
amalgamation or merger leading to concentration of economic power.
6.1 A CASE STUDY ON THE MERGER OF HLL AND PONDS
It was found that the proposed merger would not be a surprise to the Indian
stock market because it’s only a consolidation by a parent company. ‘If one
examines the history of Unilever, Hindustan Lever and Pond’s (India)
Limited, one would find an important role of mergers, acquisition and
corporate restructuring in their growth.’
6.1.1 MERGERS, ACQUISITION AND CORPORATE RESTRUCTURING IN
HISTORY OF UNILEVER
• UNILEVER ROOTS
Few would have thought that the merger of two companies in 1929 would
develop into one of the world’s most progressive, fast-moving, consumer goods
businesses but that is what Unilever is today. But Unilever’s origins stretch
backs much further than 1929 when the Company was formed. Other
entrepreneurs whose businesses have become part of Unilever have helped the
business to grow and prosper.
• LEVER BROTHERS
William Hesketh Lever, later Lord Leverhulme, founded Lever Brothers in 1885
after working in his father’s wholesale grocery business. He introduced Sunlight,
the world’s first packaged, branded laundry soap, backing it with a large-scale
advertising campaign. He soon established soap factories in Europe, North
America, Australia and the Far East, and oil mills at Port Sunlight in the UK and
Balmain, Sydney in Australia. After 1917 he moved into the food trade, acquiring
fish shops, as well as canned foods, meat and ice cream businesses. Port
Sunlight is the site of William Lever’s factory in the UK and houses a thriving
detergents plant and research laboratory. Here too is the model village, which
William Lever began to build for his workforce and their families in 1888. He
provided them with decent affordable housing and pioneered welfare schemes,
recreational facilities and many other benefits. The houses in this attractive
village, complete with its own church, hotel and school, are now sold on the open
market. But the village stands as a monument to its founder’s philanthropic
• UNILEVER WAS CREATED IN 1929 WHEN MARGARINE UNIE
MERGED WITH LEVER BROTHERS LIMITED.
The Dutch established the first margarine factories in the 1870s and 1880s,
although margarine was invented in France. In 1872 both Jurgens and Van den
Bergh began commercial production of margarine, which came to be known as
Both Margarine Unie and Lever were in the business of supplying goods for
household needs but were competing for supplies of oils and fats. The merger
made sound commercial sense. Margarine Unie’s strengths were in mainland
Europe, while Lever Brothers were market leaders in the United Kingdom. At the
time of its creation, Unilever already had an international presence - William
Lever had plantations and trading activities in Africa and there were also
business operations in the US and Asia.
• FAMOUS FOUNDERS
Here is the brief about the founder of various businesses who had started their
business in 18th
century and prospered. They had come under the umbrella of
Clarence Birdseye 1886-1956
Clarence Birdseye changed the eating habits of millions and founded a new
industry in frozen foods. Inspired by the fresh taste of frozen fish when he worked
in the Arctic north of Canada, he developed the technology to quick-freeze food
on a commercial scale. The business made great progress in the 1930s and
in 1943 Unilever obtained the right to manufacture and sell frozen foods
under the Birds Eye name in the UK.
Thomas J Lipton 1850-1930
After a spell working in the US, Thomas Lipton opened his first provisions store in
his hometown of Glasgow, Scotland at the age of 21. The number of stores
expanded and he began to buy tea direct to get cheaper and better-flavored pre-
packed teas. In 1890 he bought his first tea plantations in Ceylon (now Sri
Lanka). In 1898 Queen Victoria knighted him. His company became
associated with Unilever in the 1920s.
Arthur Brooke 1845-1918
Taking over his father’s small tea wholesale business in the north of England,
Arthur Brooke opened his own shops under the Brooke Bond name and became
part of Unilever. In the 1880s Arthur Brooke began to sell tea wholesale and
a century later, when Unilever acquired the company in 1984, it was
employing 76,000 people and operating on all continents.
Chesebrough and Pond’s
Robert Augustus Chesebrough was a New York chemist who in the 1860s
developed the first petroleum jelly that was pure, colourless, odourless and safe.
He called it Vaseline. In 1955 the company merged with the Pond’s Extract
Company founded by Thereon Pond to create Chesebrough Pond’s Inc,
USA. His first success was Pond’s Extract, using the healing powers of the
hamemelis tree. The introduction of Pond’s Vanishing Cream and Cold Cream in
the early 1900s provided the first mass-produced, low-cost beauty and skincare
products. Unilever acquired this company in 1986.
Bohemia, in central Europe, was the home of the Schicht family, founders of a
soap business that prospered during the latter half of the 19th
century under the
watchful eye of Johann Schicht. He was a pioneer of branding and an
enlightened employer. Trading problems and an acute shortage of raw
materials and able-bodied staff during the First World War, combined with
the subsequent loss of sales territory, led the company to enter into an
agreement with Jurgens and Van den Bergh’s. In 1929 the company
merged with Margarine Union, shortly before Unilever was formed.
6.1.2 UNILEVER HISTORY AFTER ITS CREATION IN 1929
• 1930 GREAT DEPRESSION
The economic slump of the 1930s affected every aspect of the operation from the
manufacturing of detergents, personal products, edible fats and foods, to the
buying and processing of more than a third of the world’s commercial oils and
Despite the severe downturn, Unilever prospered. Branded products offering
added variety and quality were skillfully marketed. Margarine, toilet soaps and
foods such as sausages, pies and ice cream were sold.
At this time a new form of leadership was created. A Special Committee or
‘inner cabinet’ was formed, consisting of three directors, usually the
chairmen of the two parent companies and a vice-chairman. This ‘inner
cabinet’, which defined broad policies and gave strategic direction,
remained an important part of Unilever’s organizations for the next 65
• SECOND WORLD WAR
The Second World War interrupted the natural development of the company, as
many manufacturing operations were diverted to the war effort. The Company
helped produce tank periscopes and packs of soldiers’ rations. By 1945 a
number of Unilever’s businesses in Central and Eastern Europe and in Asia
had been cut off and remained in isolation for many years.
• NEW PRODUCTS NEW MARKETS
In 1930 soap and edible fats had accounted for 90 per cent of Unilever’s profits.
By 1980 they contributed no more than 40 per cent. But sales of frozen foods, ice
cream, packaged soup; tea and personal products had all increased significantly.
The geographical emphasis was changing as well. In 1930 only 20 per cent of
net profit came from outside Europe. Fifty years later this had doubled to 40 per
cent, mainly through expansion in South America, Africa and Asia. In the 1980s
Unilever undertook a massive restructuring program. A decision was made to
concentrate on core businesses, those in which it had a critical mass and a
promising future. Detergents, foods, toiletries, specialty chemicals and
agribusiness were selected.
• CONCENTRATING ON CORE BUSINESSES
Restructuring was costly but it improved profitability. By 1986 the company had
sold most of its service and ancillary businesses. At the beginning of the 1990s
Unilever pruned down its core businesses still further. The packaging
companies and the major part of its agribusiness interests were sold,
leaving four core product groups – home, personal care, foods, and specialty
chemicals - which by 1991 accounted for 96 per cent of sales.
The Company also embarked on an aggressive acquisition program. Between
1984 and 1988, around 80 companies were bought up. Valuable new prizes were
secured: the Brooke Bond Group in 1984 and Chesebrough-Pond’s in the US in
Unilever was strengthening its position in personal products around the world.
After the acquisition of Chesebrough-Pond’s, Unilever acquired the
Faberge/Elizabeth Arden and Calvin Klein fragrance businesses in the late
1980s. It now had a firm base in the prestige sectors where margins and growth
rates were attractive.
Unilever has maintained a presence in almost every region of the world over the
years, through local companies or export operations. It is investing an increasing
proportion of its resources in emerging economies. In 1996, 27 per cent of total
Unilever investments were made in emerging markets.
• 1996 A NEW STRUCTURE FOR UNILEVER
In 1996 Unilever changed the organisation of its top management for the first
time since the Company was formed. Under the new structure, the chairmen of
Unilever PLC and Unilever NV, together with directors responsible for Foods,
Home & Personal Care, Finance, Personnel and Strategy & Technology form an
Executive Committee or ExCo. On behalf of the Company’s various boards, Ex
Co is responsible for taking key decisions and planning long-term strategy.
Twelve business group presidents have operational responsibility for
implementing this strategy throughout the business.
The two category directors for Foods and HPC provide central resources and
strategic direction for the corporate categories.
Acquisition plays a continuing role. Over 100 purchases were made between
1992 and 1997, including Helene Curtis (hair care) and Diversey (industrial
cleaning) in 1996 and Kibon (ice cream) in 1997.Unilever is expanding further
throughout the world. In doing so, it faces tough competition. But with its
understanding of the consumer, its technical expertise and its strong brands, it is
well placed to meet the opportunities and challenges of the 21st
• UNILEVER IN INDIA
In 1888, less than four years after William Hesketh Lever launched Sunlight Soap
in England, his newly founded company, Lever Brothers, started exporting the
revolutionary laundry soap to India.
By the time the company merged with the Netherlands-based Margarine Unie in
1930 to form Unilever, it had already carved a niche for itself in the Indian
market. Coincidentally, Margarine Unie also had a strong presence in India, to
which it exported Vanaspati (hydrogenated edible fat).
A year after the merger, Unilever set up the Hindustan Vanaspati Manufacturing
Company, its first subsidiary in India and went on to strengthen its position by
establishing two more subsidiaries, Lever Brothers India Limited and United
Traders Limited, soon afterwards. The three companies, which marketed Soaps,
Vanaspati and Personal Products, merged in 1956 to form Hindustan Lever, in
which Unilever has a 51% stake.
6.1.3 HISTORY OF HLL
1888 - Lever soap, ‘Sunlight’, introduced in India through Imports
1918 - Vanaspati (hydrogenated edible fat) launched through imports
1930 -Unilever created through the merger of Lever Brothers, UK, and Margarine
1931 - Unilever registers company in India: Hindustan Vanaspati Manufacturing
Company (HVM) for local manufacture of Vanaspati.
1933 - Lever Brothers India Limited (LBIL) incorporated in India to manufacture
1935 - United Traders Limited (UTL) incorporated in India to market Personal
1956 - The three subsidiaries, HVM, LBIL and UTL, merge to form Hindustan
Lever Limited (HLL)
1958 - Hindustan Lever Research Center starts functioning
1979 - Chemicals complex commissioned at Haldia, West Bengal.
1993 - HLL’s largest competitor, Tata Oil Mills Company (TOMCO) merges with
Erstwhile Brooke Bond India acquires Kissan Business from the UB
Group and Dollops ice-cream business from Cadbury. Doom Dooma
and Tea Estates Plantation divisions merged with Brooke Bond
-Brooke Bond and erstwhile Lipton India merge to form Brooke Bond
Lipton India Limited
1994 - HLL and US-based Kimberley-Clark Corporation form 50:50 joint venture,
Kimberley-Clark Lever Ltd.
1995 -HLL and Indian cosmetics major, Lakme Ltd, form 50:50 joint venture,
Lakme Lever Ltd.
HLL acquires Quality and Milkfood 100% brand names and
HLL and US-based S.C. Johnson & Son Inc. form 50:50 joint venture,
Lever Johnson (Consumer Products) Pvt. Ltd.
1996 -HLL and Associate Company, Brooke Bond Lipton India Limited, India’s
biggest in Food and Beverages, merge.
1997 - HLL and Gist Brocades BV form 50:50 joint venture, Lever Gist Brocades,
to market ‘Gold Seal Fermipan Instant Yeast’ for baking industry.
1998 - Group Company, Pond’s India Ltd., merges with HLL.
HLL acquires Lakme brand, factories and Lakme Ltd’s 50% equity in
Lakme Lever Ltd. HLL acquires manufacturing rights of Kwality ice cream.
6.1.4 HLL BUSINESSES
HLL’s core business comprises of soaps (18%), detergents (16%), personal
products (19%), Tea (16%), coffee (2%), Oils, vanaspati and dairy products (6%),
branded staples (2%), Ice-cream (1%), culinary products (1%). Animal Feed,
specialty chemicals and other small businesses contribute to the balance 18% of
6.1.5 PONDS INC
Chesebrough - Pond's Inc, USA, manufacturer of cosmetics and toiletry products,
set up an Indian branch in 1947 in Bombay. The first plant was set up at
Bangalore in 1956. In 1968 all operations were integrated and shifted to Madras.
In May 1977, an Indian company Pond's (India) Pvt. Ltd. was incorporated
to take over the cosmetics and toiletries business of the Indian branch of
Chesebrough-Pond's to comply with the provisions of FERA.
In July 1978 the company became a public limited company following a public
issue, also thereby reducing foreign equity holding in the company to 40%. A
new manufacturing unit was set up at Tindivanam (T.N.) in 1981. Plants were put
up at Pondicherry(T.N.) for soaps and shoe uppers.
During 1983-84 the undertakings at Kodaikanal and Kandla of Pond's Exports
were taken over by the company. In 1982 the first joint venture with Sri Lanka
was signed. In 1983 a 100% EOU to manufacture clinical thermometers was set
up in Kodaikanal (T.N.). The R & D center in Madras came up in 1982. The
company diversified into processing and canning mushrooms and commissioned
a 100% EOU in Nilgiris in 1991. During 1986 Pond's introduced its own
toothpaste and tooth brushes, manufactured by International Dental Care
Products and marketed by Pond's.
In December 1986 Unilever acquired Chesebrough Pond's Inc. and with this
Pond's (India) came under Unilever fold. Quest International India Ltd. (with
Unilever holding 73% and Pond's and Hindustan Lever holding 27% in the
company) was merged with Pond's (India) from November 1993. After the
amalgamation Unilever’s stake in Pond's went up from 40% to 52.5% and
Pond’s (India) became subsidiary of Unilever.
6.2 THE HLL - PONDS POST MERGER SCENARIO
The two companies had significant overlaps in Personal Products, Speciality
Chemicals and Exports businesses, besides a common distribution system since
1993 for Personal Products. The two also had a common management pool and
a technology base. The amalgamation was done to ensure for the Group benefits
from scale economies both in domestic and export markets and enable it to fund
investments required for aggressively building new categories, such as
deodorants and other Personal Products.
(For more detail please, refer Annexure A & B)
• SEGMENT WISE SALES OF PRODUCTS
Soaps, Detergent & Household Care
Chemicals Agriculture fertilizers & Animal feed
It is observed that, compared to yr 1997 there is increase in personal care
product sales in the yr 1998 by 10 % indicated by color yellow, which is the effect
of merger. From 1994 to 1997 total % of sales of personal care products were 10
% but after merger it got increased by 10 % and so this sales has become 20 %
of the total product profile.
• TOTAL NET SALES
This graph clearly indicates that there is a growth in the total net sales, going in
an upward direction from 1998 (i.e. after merger) indicating that this merger has
also become fruitful for HLL.
• ASSETS TURNOVER
After merger working capital T/O ratio suddenly increased. This fact can be seen
from above graph that, from 1997 there was down ward slope of graph and
suddenly after merger in 1998 it get raised. In 1995 after the merger of Lakme
India with HLL, working Capital Turnover get pulled upward and in 1997 it again
reduce down but this ponds merger pulls up this Working Capital turnover
The magic of economic liberalization worked wonderfully with its positive impact
on the economy till 1995 - 96. The Indian economy has been having a testing
time since the middle of 1996. The performance of some major industries has not
been encouraging, but the software, plantation, pharmaceutical and select
chemical industries have acquitted themselves well. Worldwide recession and
slowdown in world trade also contributed to the problems. Therefore mergers and
acquisitions are going to play an important role not only in India but also
everywhere in the world.
Many companies are realizing at an increasing speed the need to merge and
grow big .The small ones are being swallowed by the bigger ones and they in
turn are being gulped by the still bigger ones. Above study reviews one important
derivation – Merger & Acquisition has given special boost to the overall progress
of both – HLL & Ponds (I) Limited -surpassing their previous individual turnover
marks. Graphically it also indicates their substantial growth in earnings and
dividend per share, sales figures and assets turnover ratio.
From 1992, Hindustan Lever Limited has been adopting a strategy of growth
through the mergers & acquisition route. This strategic direction is highly
influenced by its parent company, which is also pursuing the same strategy.
Between 1992 and 1997, HLL adopted a strategy of growth by acquisition. Over
this period of five years, net sales grew 4.5 times Rs 7737 crore. Gross fixed
assets rose 3 times to Rs 1035 crore and more significantly, net profit (net of
non-recurring transactions) grew 5.9 times to Rs 573 crore.
Herewith I conclude that the merger between HLL & Ponds (I) Limited is
successful and also mutually beneficial in the long term. This can be an
ideal example & milestone in the history of Indian business.
So next time when you think to merge with any company first, determine if a
merger or acquisition is necessary. This is the most important step, as a poorly
handled merger or acquisition can damage even a strong firm. Could your need
for employees be solved in another way? For instance, if you would like to
increase your presence in the market, you could hire a marketing contact or a
small team to work in that specific area. If this would not be enough, you may
want to consider an acquisition or merger. If you have experienced a merger or
acquisition before, this is the time to assess how it went last time, whether it
helped your firm, and how you feel it could help your current situation.
Take your time and determine whether a merger or acquisition will really help
your current situation or simply exacerbate existing problems.
1. Financial management – I M Pande
Page No.1098 – 1105
2. Strategic Planning & management – P. K. Ghosh
Page No.234- 241
3. Strategic planning - Formulation of corporate strategy
V. S. Ramaswamy & S. Namkumari.
Page No- 367- 410
• ARTICLES / NEWS PAPERS
1. ‘ Altogether now ’ - The Telegraph (Calcutta), May 10 1996
- Kaustubh Ghosh
2. A disaster called merger ’ -The Economic Times, January 17 1998
- Rajiv Handa
3. ‘ The cultural cauldron ’ - Business Standard, March 17 1998
- Indrajeet Gupta
4. ‘ Wrong Priorities ’ -The Economic Times, April 4 1998
- Ram Manohar Reddy
5. ‘ The urge to merge ’ -Outlook, April 6, 1998 – Neeraj Jetley
6. ‘ McLeod merges, Eveready emerges ’ - Calcutta Bureau, Sep 24 1998
7. ‘ Lakme, HLL launch 50:50 marketing venture ’ -The ET, Nov 13
8. ‘ Motives behind mergers ’ -The ET, April 28
9. ‘ Mergers are a good alternative ’ – Rashid J
Earnings per share Vs dividend per shares
From 1998 slope of EPS suddenly gets raised.
Accordingly DPS also got an uplift.
In 1997 – Rs. 28.14 and in 1998- Rs. 36.70
Profit after tax in %
In 1997 it was7.42% in 1998 it got raised by
8.83 & in 1999 it got uplifted up to 10.55 %
Return on capital employed (%)
Return on net worth (%)
In 1998 return on capital employed is increased
up to 61.84 which was in previous yr at 58.65
Interest covered in 1997 26.09 times
In 1998 it was 39.61 times
In 1999 it was 63.00 times
Table1: Audited results
Audited Results for 1998 Rs. Crores
Gross Turnover (including excise) 10215.24 8342.75
Turnover (net of Excise) 9481.85 7819.71
Profit Before Tax, before exceptional items 1130.44 850.25
Profit After Tax, before exceptional items 837.44 580.25
Net Profit, after exceptional items 805.71 560.37
Earnings Per Share (EPS) Rs.36.70 Rs.28.14