The aim of this article is to identify and determine various dimensions of deal characteristics affecting the post-acquisition performance of Indian target firms. Available researches have focussed on the stock market reaction as the indicator of target firm performance. Nonetheless, various determinants are found to affect the post-acquisition performance of target firms. Bearing that in mind, this article focusses on the significance of deal characteristics while assessing the performance of the Indian target firms post-acquisition. The article attempts to analyse the post-acquisition performance of target firms independent of the acquirer firm to get a more appropriate perception of their position. The change model, generalised method of moments (GMM) model and the regression model has been employed to assess the changes in operating performance, analyse the importance of financial variables in post-acquisition performance and study the impact of deal characteristics in the post-acquisition performance of the Indian target firms. The outcomes reveal that there has been a significant difference in the improvement of targets depending on whether it has been taken over by a domestic acquirer or inbound acquirer.

Securities and Exchange Board of India (SEBI) has recently decided to tighten screws on “Participatory Notes” also known as “P-Notes”. P-Notes, or off-shore derivative instruments (ODIs), are instruments issued by foreign portfolio investors (FPIs) to overseas investors who wish to invest in Indian stock markets without registering themselves with SEBI. This makes P-notes susceptible to use for money laundering and round tripping. SEBI’s current move aims to curb these activities by making P-notes a more regulated instrument and thereby making it less attractive. This paper examines the possible effect of a decrease in foreign investment through P-notes on the Indian stock market and finds that investments through P-Notes do not seem to have a significant impact on the Indian Stock Market.