Proficiency in Business Finance Assignment II (Mini Project) Topic 1. Analysis of Capital Structure of Nifty50 companies Topic 2. Analysis of Dividend Policy of Nifty50 companies...

Analysis of Capital Structure of Nifty50 Companies
Introduction
The capital structure of a company refers to the sources of its financing and the amount allocated to each source. It is one of the most important decisions taken by the management of a firm, as it can influence the financial health of a firm as well as its cost of capital. The capital structure of a company is determined by two factors – the cost of each source of capital used and the availability of different sources of capital. This paper will analyze the capital structure of ten (10) companies part of Nifty50, namely, Hindustan Unilever Limited, HDFC Bank Limited, Infosys Corporation, ITC Corporation, ICICI Bank Limited, Kotak Mahindra Bank Limited, Reliance Industries Limited, State Bank of India, Tata Consultancy Services and Tata Motors Limited, for the years 2019-20, 2020-21 and 2021-22.
Methodology
In order to analyze the capital structure of the Nifty50 companies, the following sources of data were used:
1. Financial Statements of the companies.
2. Reports from various financial websites such as the Bombay Stock Exchange, MoneyControl and Yahoo finance.
The data obtained from the financial statements was used to calculate the debt-equity ratio for each of the companies, for the years 2019-20, 2020-21 and 2021-22. This ratio was used as an indicator of the capital structure of the company.
Analysis
The debt-equity ratio of the Nifty50 companies, for the years 2019-20, 2020-21 and 2021-22 is given in the table below:
    Company Name
    Debt/Equity
    
     2021-22
     2020-21
     2019-20
    Hindustan Unilever Limited
     -
     -
     -
    HDFC Bank Limited
     0.77
     0.67
     0.85
    Infosys Corporation
     -
     -
     -
    ITC Ltd
     -
     -
     -
    ICICI Bank Limited
     0.63
     0.62
     1.40
    Kotak Mahindra Bank Limited
     0.36
     0.37
     0.78
    Reliance Industries Limited
    0.41
    0.41
    0.65
    State Bank of India
     1.52
     1.64
     1.36
    Tata Consultancy Services
     -
     -
     -
    Tata Motors Limited
    1.17
    1.14
    1.14
· Hindustan Unilever Limited: Hindustan Unilever Limited's debt/equity ratio is not available for the last 3 years as the company does not have any significant debt. Its capital structure is made up of equity, and the company finances its growth through both internal and external accruals.
· HDFC Bank Limited: HDFC Bank Limited's debt/equity ratio was 0.77 in 2021-22, 0.67 in 2020-21, and 0.85 in 2019-20. The company has a relatively conservative debt policy, and its capital structure is made up of a combination of debt and equity.
· Infosys Corporation: Infosys Corporation's debt/equity ratio is not available for the last 3 years, as the company does not have any significant debt. It is well-known for its low debt and its capital structure is composed of only equity.
· ITC Ltd: ITC Ltd's debt/equity ratio is not available for the last 3 years, as the company does not have any significant debt. It has...