AN EMPIRICAL STUDY ON THE CAPITAL STRUCTURE OF OIL AND GAS COMPANIES IN INDIA

Abstract This paper attempts to examine the firm specific factors which determine the capital structure decisions of publicly traded oil and gas companies of India. Based on the market capitalization, top five oil and gas companies listed in BSE are selected. Using multi regression model, accounting data of companies over a period of 10 years from 2007-2016 is chosen and the empirical study is conducted. Firm specific factors such as tangibility, firm size, liquidity, non debt tax shield, growth rate and profitability have been analyzed to check their influence on the leverage structure of the selected oil and gas companies in Indian context. Total debt leverage is taken as dependent variable and firm specific factors are taken as independent variables. It has been found from the study that growth rate and firm size are statistically significant determinants of capital structure of the listed oil and gas companies. Key words: Capital structure, leverage, tangibility, liquidity, firm size, profitability JEL classification: G32