Global economic condition has been changed from thepast several years particularly exports ones in Indian companies. So, the companiesstarted re-structuring their strategies for the changed situations and it alsogave a strong pressure to the Indian managements to control all these hurdlesincluding cost, benefits, risks etc. restructuring of capital structure is notsimple one and also took time to do it because capital structure is a long-termdecision and it requires proper direction of the companies. Capital structure ofthe company is a combination of a different alternatives of equity and debtthat will be used for the capital formation. Capital formation is an importantone in the decision making not just because its long-term purpose but also requiresseveral factors to include, it’s an irreversible in the nature. Several studies have done in the area of capital structureand its determinant and receives significance gradually, it has stated once thetheory of Net income approach has developed by Durand and states that changes inthe capital structure will bring proportionate change in the value of the firmbut it got several critics by saying that assumption which carrying by thattheory is unrealistic. Net operating income approach has developed by opposingthe NI approach and it saying that changes in the capital structure will notbring any changes in then value of the firm.
Modigliani and Miller (1950s) has contributedimportant suggestions in the field of capital structure but they kept modifyingthe theory by adding corporate tax in their assumptions.An effort has been taken on the selected tennon-financial Indian firms to determine the specific factors which covers theyear 2006-2015 and selection of the companies are based on the highest turnoverin the Indian market. The main objective of the study is to mainstream theimportant factors which influencing the capital structure decision so the managementcan take better decision on the capital structure. The studies have beendivided into six divisions including the present one rest of the studies havegive below · Objective of theresearch study· Earlier literaturesregarding capital structure and its determinants· Data source and methodology· Analysis and findings· Summary andconclusion