Abstract
Understanding the role of capital structure and ownership structure on performance has raised interest among researchers in corporate finance. The present examination delves into identifying the effect of capital structure and Indian promoters’ holding on performance based on a sample of selected large-cap firms in India. This study considers a period from 2015 to 2022 covering companies listed in the BSE-Sensex. The research uses accounting-based performance as the performance parameter and share of long-term debt for capital structure. Indian promoters’ holding is considered a proxy for ownership structure. The results demonstrate that though there exists a significantly negative effect of debt on performance, promoters’ holding has an insignificant effect on return on assets. The study implies that firms should be careful about resorting to long-term debt and thereby call on managers to control debt levels. The absence of a noticeable effect of Indian promoters’ ownership shifts the focus on foreign and institutional ownership.
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