Purpose The purpose of this paper is to determine the factors affecting the capital structure of companies engaged in the Indian energy sector. Design/methodology/approach Capital structure theories and empirical literature have been reviewed to formulate propositions concerning the factors/variables determining the capital structure of Indian energy companies. The examination is done using panel data techniques for the sample 141 companies operating in the Indian energy sector. Findings The results show firms’ age, asset turnover ratio, liquidity and firms’ size to be significant determinants of capital structure for the Indian energy companies, while profitability, debt service capacity, sales growth, non-debt tax shield and tangibility ratio to be insignificant determinants. Historically, profitability has shared a significantly negative relationship with debt ratio; however, the relation here is not significant. Research limitations/implications The focus of the current study is on Indian energy sector, the results obtained will not be applicable for other sectors. Originality/value The current research gives an insight into the determinants of capital structure of the companies engaged in the Indian energy sector, which are mostly overlooked due to the laws, policies and regulations governing the sector as a whole.

This article examines the evolution of the concept of energy security and its proper meaning with regard to India’s energy sector. In the context of energy security, it aims to understand the impact of rising gross domestic product (GDP) per capita and change in oil prices on energy use; patterns in production, consumption and import of major sources of energy, such as crude oil, natural gas and coal in India; and the current structure of India’s energy sector and the impact of regulatory policies thereon. The evidence shows that GDP per capita and energy use per capita have a bidirectional causal relationship and these two also cointegrate. There also exists a unidirectional causal relationship from oil prices to energy use. No causal relationship is observed between oil prices and GDP per capita. For all the sources of energy, the indigenous production capacity is unable to match the consumption requirement, and hence there is an increased dependence on the import of these sources. A major impediment in the achievement of energy security by India is the current regulatory and policy environment that fails to make the sector more attractive for private sector participation and investment.