IMPACT OF CORPORATE RESTRUCTURING ON SHAREHOLDER VALUE: INDIAN FIRM'S PERSPECTIVE

Abstract

Corporate restructuring has emerged as a strategic response to dynamic market conditions, regulatory changes, and competitive pressures. In the Indian context, such restructuring activities are increasingly seen as key drivers of organizational transformation and shareholder wealth creation. This study explores the impact of corporate restructuring on shareholder value, focusing on Indian firms that have undergone restructuring over the past decade. The research provides a balanced view, combining both financial analysis and strategic insights. Key highlights of the study are as follows:  Objective: To assess whether corporate restructuring activities result in value creation for shareholders, using financial performance indicators and market responses.  Scope: The study covers different types of restructuring—mergers, acquisitions, demergers, spin- offs, and internal reorganizations—within the Indian corporate sector.  Methodology: A combination of qualitative case studies and quantitative financial analysis (such as changes in stock price, EPS, ROE, and market capitalization) has been employed.  Findings: o Not all restructuring leads to immediate gains, but well-planned strategies often result in medium to long-term shareholder value creation. o The success of restructuring is significantly influenced by timing, industry trends, execution quality, and leadership effectiveness. o In some cases, short-term volatility is observed, but market correction usually follows once the strategic benefits become visible.  Indian Perspective: Indian firms are increasingly using restructuring as a tool for growth, cost optimization, and market expansion, especially post liberalization and during sectoral reforms.  Implications: The research offers actionable insights for corporate managers, policymakers, and investors regarding when and how to undertake restructuring for optimal outcomes.  Conclusion: Corporate restructuring, when aligned with long-term strategic goals, proves to be a valuable instrument for enhancing shareholder value. However, it requires careful planning, transparent communication, and efficient implementation. This study adds to the limited academic literature on restructuring in the Indian context and highlights real-world applications, offering a platform for future research and strategic development.