Indebtedness in Indian Manufacturing Firms:The Evidence Revisited

This paper analyzes the financing pattern and the determinants of indebtedness of listed standalone Indian manufacturing firms using financial information from 2006-2015. Our findings suggest that stand-alone manufacturing firms rely on banks as a primary source of borrowed capital, and such borrowing is almost always on a secured basis. Our findings also suggest that the distribution of bank credit has got increasingly skewed in favor of large firms. With regard to the determinants of indebtedness, our analysis reveals significant difference in the borrowing behavior of these firms when compared to existing evidence.