• Dr Gurnam Singh Rasoolpur

This present paper examines the capital structure is a function of collateral value of assets through a case study of Indian corporate sector by classifying the capital structure of sample companies by collateral value of assets. The present study, although an exploratory effort, is limited to 298 out of top 500 private sector manufacturing firms selected for eleven years on the basis of sales turnover for the year 2004-2005, published in Business Today. The study reveals that with the rise in collateral value of assets ranges, the number of companies is moving from lower capital structure ranges (0-100 percent) towards higher capital structure ranges (100-200 percent) under the first two broader categories of capital structure ranges during the period under study. However, in the last two broader categories of capital structure ranges, reverse trend has been experienced. It is also observed that around 92 percent and 8 percent companies are lying in 0-200 percent and more than 200 percent capital structure ranges during 1995-96 while around 89 percent and 11 percent companies are also lying in same capital structure ranges for the variable under study during 2005-06, respectively. Overall, rise in collateral value of assets results in the expansion of number of capital structure ranges during the period under study. Thus, it emerges that at lower collateral value of assets, there exists lower capital structure ranges and vice-versa, which represents positive relationship between capital structure and collateral value of assets ranges during the study period. It shows that fixed assets are being used as collateral value by the companies for generating debt capital. That is why the companies are using more amount of debt for financing purposes. It has been observed that higher collateral value of assets helps the companies to touch the well established standard range debt of 200 percent (2:1) during the study period.

Capital Structure, Net Sales, Shrinkage

"IS CAPITAL STRUCTURE IS A FUNCTION OF COLLATERAL VALUE OF ASSETS?: A VARIABLE-SPECIFIC ANALYSIS", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.5, Issue 5, page no.1250-1258, May-2018, Available :http://www.jetir.org/papers/JETIR1805949.pdf

"IS CAPITAL STRUCTURE IS A FUNCTION OF COLLATERAL VALUE OF ASSETS?: A VARIABLE-SPECIFIC ANALYSIS", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.5, Issue 5, page no. pp1250-1258, May-2018, Available at : http://www.jetir.org/papers/JETIR1805949.pdf