Determinants of Capital Structure: A Study of Indian Companies

The primary motive of this research is to find the determinants influencing the capital structure of the Indian companies of IT, Automobile, Petroleum industries. Review of capital structure theories has been done to find the determinants influencing the capital structure of selected companies of IT, Automobile and Petroleum Industries. This study used panel data of five largest companies of each industry during 2004 to 2018. Linear panel regression model has been used to check the relation of DE ratio with the NPR, CR, ROA and ROCE. Descriptive statistics and unit root test also used to check the reliability of data. The results suggested that NPR, CR, ROA and ROCE are having influence on the debt-equity ratio which is a measure of capital structure. And there is different impact of all the measures on different industries. It is very important to know the factor influencing the capital structure, it seems very useful in deciding the ratio of debt and equity in capitalization. This research maybe useful in deciding the capital structure of the Indian companies which are of large capitalization.