A Study on the Impact of Capital Structure and Dividend Decisions in Construction Companies

Abstract

This study examines the relationship between capital structure decisions and dividend policies across four major Indian construction companies—Reliance Infrastructure, Godrej Properties, NCC Limited, and PNC Infratech Limited—over the period 2014-2024. Using data collected from annual reports and financial databases, we analyze how leverage ratios correlate with dividend payout patterns. Our findings reveal significant variations in how these companies balance debt financing against shareholder returns during a decade marked by regulatory shifts, economic volatility, and industry transformation. Statistical analysis indicates that higher debt levels generally correlate with more conservative dividend policies, though the strength of this relationship varies considerably between firms based on growth opportunities, project portfolios, and corporate governance structures. The research contributes to the understanding of financial decision-making in capital-intensive industries and offers insights for investors and managers in the construction sector.