A Study on Determining Capital Structure Essentials in Listed Public Sector Companies While Raising Short Term Debt

The paper studies the impact of ten variables while raising short term debt in public sector companies in India. Existing research on capital structure has been confined to developed economies. The Indian Financial Market has been growing at an exponential rate even though encountering two recessions during the study period. The paper utilizes a larger data set in comparison to the earlier studies in India and examines additional factors. This study presents empirical evidence on the determinants of the capital structures with data from NSE Listed Companies. The study period in the study is from 2001 – 2010 with a sample size of 61 companies. The objective of the paper is to identify the factors which help while raising long term debt of public sector companies in India using Regression Modeling. The empirical results imply that Cost of Debt has a significant impact while raising short term debt of Public Sector Companies in India.

Keywords: Capital Structure, Public Sector Companies, Leverage, Corporate Finance, India

JEL Classification: JEL G32.