Financial Leverage and Firm Value: An Empirical Analysis of Hindalco Industries Limited

The Aluminium industry is an essential metal industry which supplements many developmental activities of a country. Since the new millennium era, the Aluminium industry has witnessed a paradigm change in its functioning as the demand for Aluminium is increasing at a swift rate and many industrial production activities are dependent on Aluminium. The per capita Aluminium consumption has shown an upward trend during the last decade, the demand for Aluminium in automobile, consumer durable industry, tools & machine manufacturing, fabrication sector, etc. grew at an accelerating rate to support the growth and augment the Indian GDP. This change amplified the demand for capital investment by firms' to enhance the Aluminium production facilities to support the growth of manufacturing. Generally Aluminium producing firms' are capital intensive and require substantial commitment of capital resources in order to function efficiently. The purpose of this article was to determine the influence of financial leverage on firm value with special reference to Hindalco. This research paper has used secondary data sourced from the official websites of the company for the period 2011-2015. The correlation and regression tests were applied to prove the postulated hypothesis using SPSS to ascertain the influence of leverage on firm value. Overall findings indicate that there is significant negative influence of leverage on firm value with reference to Hindalco Industries Limited. Keywords: Leverage, Aluminium, Regression, Capital, Firm Value, Statistics, Correlation JEL Classification: G30, G31, G32, G39