A STUDY ON CAPITAL STRUCTURE DETERMINANTS OF INDIAN STEEL COMPANIES

This paper studies the determinants of capital structure choice of Indian steel companies. The main objective of the firm is to explore the most important factors which influence most the choice of capital structure of the steel companies in India. The study is basically empirical in nature. In the present paper 37 Indian steel companies listed under National Stock Market and Bombay Stock Market constitute the sample of study. Correlation and regression analysis are used to explore the relationship between dependent variable leverage and other independent variables like tangibility, size, non-debt tax shield, growth opportunity, profitability and business risk. It is found that tangibility, non-debt tax shield, size and growth opportunity have significant effect of the leverage of the capital structure of the companies. The other two variables, profitability and business risk have insignificant effect on the capital structure of the companies.