Research Scholar in Ravenshaw University, Cuttack. He is a Chartered Accountant and Assistant Professor in Finance and Accounting. Xavier School of Commerce, Xavier University, Bhubaneswar, Odisha, E-mail: abhimanyu@xsc.edu.in
Online published on 6 July, 2016.
The paper analyses the pattern of corporate risk management practices through financial derivatives in top Indian non-financial companies and explores different dimensions corporate use of derivatives by using an array of financial derivative contracts to hedge against a number of business risks which are responsible for non/under-performance of business objectives. On the basis of the research results it can be concluded that forwards and swaps are by far the most important derivative instruments in India. Futures as representatives of standardised derivatives are the next best alternative of risk management tool for the Indian companies. Foreign currency risk is the most widely hedged risk through derivatives in Indian economy whereas the international derivative outstanding position reveals that interest rate risk holds the largest chunk of the total derivative exposures. The industry classification states that information technology is the sector where highest proportion derivative use is recorded.
Corporate risk management, Financial derivative instruments, Hedging, Industry classification, Large Non-financial Companies
