Firm-Specific Determinants of Capital Structure: Empirical Evidence from Selected Indian Renewable Power Energy Companies (2015–2024)

Volume 11, Issue 2, 2026

International Journal of Commerce and Management Studies, ISSN 2456-3684

Paper Title

Author Name and Affiliation

Dr. Rahul Kapale

Assistant Professor, Priyadarshini Lokmanya Tilak Institute of Management Studies & Research, Nagpur

Dr. Kartik Uttarwar

Assistant Professor, Priyadarshini Lokmanya Tilak Institute of Management Studies & Research, Nagpur

Prof. Rohit Turani

Assistant Professor, Priyadarshini Lokmanya Tilak Institute of Management Studies & Research, Nagpur

Mr. Suraj Singh

Academic Associate, Indian Institute Of Management, Nagpur

Abstract

This study examines the determinants of the capital structure in selected Indian renewable power energy companies. This study is carried out using the panel data covering the period from 2015 to 2024. The analysis of this study focuses on the impact of the firm-specific factors, namely: profitability, asset tangibility, firm size, liquidity, interest coverage ratio, growth rate, and non-debt tax shields, on leverage, which is measured by the debt-to-equity ratio. This study uses a fixed effects panel regression to evaluate the differences between the firms. The top 5 companies are selected based on their market capitalization listed in the Indian stock market as of September 2025 for this study. The empirical results of the study reveal that asset tangibility and firm size influence the capital structure significantly. Profitability, interest coverage ratio, liquidity, growth rate, and non-debt tax shields don’t show a significant relationship with leverage. These findings indicate that the capital structure decisions in the Indian renewable power energy sector are primarily driven by long-term structural characteristics rather than short-term financial performance indicators. The results of the study show strong support for the trade-off theory of the capital structure, while there is limited evidence in favor of the pecking order theory. This study contributes to the existing literature by presenting sector-specific insights into the capital structure of renewable energy companies. The findings of the study will help policymakers and corporate managers design financial strategies and regulatory frameworks for Indian renewable energy companies.

Keywords

Indian Renewable power companies, capital Structure, debt-equity ratio, panel data analysis, film-specific determinants

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DOI

DOI: 10.67061/ijcams.2026.vol.11.issue.02.4078

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