‘Merger & acquisition’: an unconventional way to grow strategically & financially - a study based on HDFC Bank & ICICI Bank

The purpose of this research paper is to find out whether one organization can consider merger and acquisition as a strategic tool for its financial growth and expansion or not. The research is based on the India‘s most two popular and leading private sector banks i.e. HDFC Bank and ICICI Bank. The result has been analyzed based on some selected financial components like: net profit, operating profit, and profit after tax, investments, and deposits, earnings per share and most importantly market price per share. To find out the result, paired “t” test has been applied to the pre and post-merger selected financial components and the result proved that after merger HDFC Bank‘s financial performance has grown rapidly. It also resulted that the merger with Bank of Madura does not have any effect on the financial performance of ICICI Bank, but the merger with Bank of Rajasthan explains a different story. The most important is that after the merger the profitability position of HDFC Bank as well as ICICI Bank have grown rapidly. Finally, this paper concluded that merger and acquisition helps an organization to grow financially and expand its business in the competitive market.