8th Economics & Finance Conference, London

COMPARATIVE STUDY OF CAPITAL STRUCTURE DECISIONS IN PUBLIC AND PRIVATE SECTOR OIL AND GAS COMPANIES IN INDIA & U.K

YASH LOLIYANA , ARSH KHAN

Abstract:

India is the fourth largest consumer of energy and the consumption is to double by 2035.This need of energy has led to the growth of the energy sector. India’s oil and gas sector has been a major contributor to India’s Gross Domestic Product (GDP). It contributes around 15% of the GDP. India as we know is not an energy independent nation. It is highly dependent on imports from other oil exporting countries such as OPEC countries and others. The companies in this sector are either private or state owned companies. Investment in the sector depends on the decisions taken by these companies which in turn affect the economy. Capital structure planning is a very important to survive in the long run. Finance department and other promoters decide which source of fund or funds should be selected after monitoring the factors affecting capital structures. The right capital structure planning also increases the power of company to face the losses and changes in financial markets. This study attempts to find the differences between the capital structures of the private and public oil and gas companies in India. The focus of the study is to understand the capital structure and if the ownership affects the capital structure of the company. The study will also do a comparative statistical analysis of the major oil companies in India with the major oil companies in the United Kingdom, namely British Petroleum and Royal Dutch Shell PLC A. The research would comprehensively study the capital structure and the debt equity ratio and find out conclusions on how the capital structure of the companies affect their earnings/profits, production levels, policy, investment, borrowing and debt levels and try to find out the current trend in capital structure in India and UK.

Keywords: Structure, Public and Private sector, debt-equity ratio, India and UK

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