• Y.Padmavati
• Dr. D.N.Mishra

When there is business, there is risk which cannot be avoided. The risk may be due to unexpected changes in price of products or stock, change in exchange rate or in interest rates or uncertainty in recovery of credit. The corporate entities take decisions with the goal of maximising the shareholders’ value and there is risk of fall in the shareholders’ value, if the decision goes wrong. The managers, who are entrusted to protect the shareholders’ value, need to use strategies to reduce such risk. As a risk management strategy, the hedging can be used in limiting or reducing the probability of loss due to fluctuations in prices of products or materials, interest rate and foreign exchange rates. Derivative contracts are the tools for hedging and thus checking the financial loss. The objective of the study is to examine the determinants of corporate hedging practices in top three Indian IT companies using panel regression model and hypothesis testing. The findings of the study are: there is no relation between value of hedged instruments with size of the company, managerial remuneration and leverage but there is negative relation between foreign currency transaction and value of hedged instruments.

Risk, Hedging, IT Companies

"Determinants of Hedging – A Study on Top Three Indian IT Companies", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.8, Issue 10, page no.c108-c117, October-2021, Available :http://www.jetir.org/papers/JETIR2110216.pdf

"Determinants of Hedging – A Study on Top Three Indian IT Companies", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.8, Issue 10, page no. ppc108-c117, October-2021, Available at : http://www.jetir.org/papers/JETIR2110216.pdf