Corporate restructuring: Analysis of select Indian cases

Abstract

Corporate restructuring is any substantial change in a company’s financial structure, or ownership or control, or business portfolio, designed to increase the value of the firm. Corporate financial restructuring involves restructuring the assets and liabilities of corporations, including their debt-to-equity structures, in line with their cash-flow needs to promote efficiency, support growth, and maximize the value to shareholders, creditors and other stakeholders. The rapidity with corporate finance due to external factors like increased price volatility, a general globalization of the markets, tax asymmetric, development in technology, regulatory change, liberalization, increased competition and reduction in information and transaction costs and also liquidity needs of business, capital costs and growth perspective have lead to practice of corporate restructuring as a strategic move to maximize the shareholder's value. As part of this study, we attempt to select a few relevant cases of corporate restructuring that has occurred in an Indian context in the past decade. The forms of restructuring that we propose to analyse are the companies selected for each are listed below. 1) Share Repurchase - Godrej Consumer Products Ltd, Godrej Consumer Products Ltd. 2) Debt Restructuring - India Cements. 3) Demerger - Larsen and Toubro