The study attempts to develop a model for predicting corporate takeovers in India. The data comprises of 37 target companies and a matching sample of control companies for the period 1997–98 to 2000–01. The study reveals that the target companies generally show a lower profit margin and ROCE with liquidity concerns being predominant for such firms. Further, such companies are tow on gearing but exhibit high valuation ratios. The model used to predict acquisitions shows moderate rate of success in the Indian context. The study has strong implications for investors and shareholders, corporate raiders and target companies, investment bankers and the regulators.
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