International Journal For Multidisciplinary Research

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A Study of Corporate Restructuring through Demerger with Special Focus on Crompton Greaves Limited

Author(s) Arundhati Mahapatra, Gouri Prava Samal
Country India
Abstract Demerger is a corporate restructuring strategy wherein a company’s business operations are segregated into one or more components in order to be able to concentrate on the central activity of the business. For this study, the demerger of Crompton Greaves Consumer Electricals Limited from Crompton Greaves Limited has been taken as a case study. CGL later altered its name to Crompton Greaves Power and Industrial Solutions Limited. This article studies the financial performance of Crompton Greaves Power and Industrial Solutions Limited in pre and post demerger period. The performance of Crompton Greaves Consumer Electricals Limited is also assessed post its incorporation. The study uses secondary data collected from annual reports of Crompton Greaves Power and Industrial Solutions Limited and Crompton Greaves Consumer Electricals Limited. The financial performance is analyzed by making use of the DuPont model of analysis. To analyze the data the study used student’s t-test in order to estimate the significant differences in paired means of variables calculated for pre and post demerger period. Economic value added is calculated to indicate long run sustainability. So, the present study also emphasizes whether demerger as a corporate restructuring technique adds value for the stakeholders. Lastly a comparative analysis among the performances in pre demerger and post demerger period has been done.
Keywords Corporate Restructuring, Demerger, Financial Performance, DuPont Analysis, Economic Value Added
Field Mathematics > Economy / Commerce
Published In Volume 5, Issue 2, March-April 2023
Published On 2023-04-30
Cite This A Study of Corporate Restructuring through Demerger with Special Focus on Crompton Greaves Limited - Arundhati Mahapatra, Gouri Prava Samal - IJFMR Volume 5, Issue 2, March-April 2023. DOI 10.36948/ijfmr.2023.v05i02.2736
DOI https://doi.org/10.36948/ijfmr.2023.v05i02.2736
Short DOI https://doi.org/gr7hf5

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