CAPITAL STRUCTURE OF DLF

PRESENTED BY Deepika Sahoo Under the Guidance of Himansu Bhusan Gochhayat

Capital structure

Capital structure defined as the mixture of resources of company in which include equity share capital, pref. shares capital and long term debts.

Why capital Structure

For the real growth of the company the financial manager of the company should plan an optimum capital for the company. The optimum capital structure maximize the market value of the firm. It also minimize the cost of capital.

Theory of capital structure Net Income (NI) Theory Net Operating Income (NOI) Theory Traditional Theory Modigliani-Miller (M-M) Theory

Net Income (NI) Theory

This theory was propounded by David Durand. According to this theory a firm can increase the value of the firm and reduce the overall cost of capital by increasing the proportion of debt in its capital structure to the maximum possible extent.

Net Operating Income Theory

Traditional Theory
This theory was propounded by Ezra Solomon. According to this theory, a firm can reduce the overall cost of capital or increase the total value of the firm by increasing the debt proportion in its capital structure to a certain limit. Because debt is a cheap source of raising funds as compared to equity capital.

Modigliani-Miller Theory
This theory was propounded by Franco Modigliani and Merton Miller. MM theory or approach is fully opposite of traditional approach. This approach says that there is not any relationship between capital structure and cost of capital. There will not effect of increasing debt on cost of capita

COMPANY PROFILE
DLF Limited or DLF (Delhi Land and Finance) is the India's biggest

real estate developer based in New Delhi, India. It is a famous builder group.
The DLF Group was founded by Raghuvendra Singh in 1946.
Now the company is headed by Indian billionaire Kushal Pal Singh. He is a richest billionaire in 2009 and now 98th richest man in world.

Business

Retails

Houses

Offices

Golf Course

CAPITAL STRUCTURE OF DLF LTD

TABLE-1 SOURCE OF FUND
Equity fund Mar2010 Equity share capital Share application money Preference share capital Total 339.48 Mar2009 339.44 Mar2008 340.96 Mar2007 305.88

(In crores)
Mar2006 37.77

_ _

_ _

_ _

_ _

_ _

339.48

339.44

340.96

305.88

37.77

TABLE-2 Deb capital

Loan fund Mar2010 Mar2009 Mar2008

(In crores)
Mar2007 Mar2006

Secured loan

11590.19

7979.79

4942.91

6242.81

3010.93

Unsecured loan

1047.67

1635.00

3440.49

526.48

2.99

Total

25467.86

21989.79

19655.55

7422.10

3658.85

Table-3
Financial year 09-10 08-09 07-08 Total equity 339.48 339.44 340.96 Total Debt 25467.86 21989.79 19655.55 Equity+Debt 25807.34 22329.23 19997.51

06-05
05-06

305.88
37.77

7422.10
3658.85

7727.98
3646.62

FY / TOTAL CAPITAL
30000

25000

20000

15000

Series1

10000

5000

0 2010-Mar 2009-Mar 2008-Mar 2007-Mar 2006-Mar

30000

25000

20000

15000

Series1 Series2

10000

5000

0 2010-Mar 2009-Mar 2008-Mar 2007-Mar 2006-Mar