21, February 2026

Financial Risk Management Practices in Indian Corporates: A Literature Review

VOLUME-10; ISSUE-2; FEB-2026

Author(s): Dr Raghuveer R

Authors Affiliations:

Faculty, MBA, Yuvarajas College (Autonomous), University of Mysore, Mysore

DOIs:10.2017/IJRCS/202602006     |     Paper ID: IJRCS202602006


Abstract
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Financial risk management has become a critical strategic function for Indian corporates operating in an environment marked by market volatility, regulatory complexity, and global financial integration. Indian firms are increasingly exposed to financial risks such as foreign exchange risk, interest rate risk, liquidity risk, and credit risk, making effective risk management practices essential for financial stability and sustainable performance. Despite the growing relevance of financial risk management, existing studies present fragmented insights focusing on specific risk types or selected industries.

This study undertakes a comprehensive literature review based on secondary data to examine financial risk management practices adopted by Indian corporates. Drawing upon theoretical foundations of corporate risk management and enterprise risk management, the study synthesizes findings from prior empirical and conceptual research conducted in the Indian context. The review evaluates commonly used risk management tools, including hedging through derivatives, diversification strategies, internal control systems, and regulatory compliance mechanisms.

The analysis reveals that large and listed Indian firms have increasingly adopted structured and integrated risk management frameworks, while small and medium enterprises continue to rely on traditional or informal practices. The effectiveness of financial risk management is found to be influenced by firm size, governance quality, industry characteristics, and regulatory support. The study concludes that a holistic and integrated approach to financial risk management enhances corporate resilience, earnings stability, and long-term sustainability. This literature review contributes by consolidating existing knowledge and identifying directions for future research on financial risk management practices in Indian corporates.

Financial Risk Management; Indian Corporates; Hedging Practices; Enterprise Risk Management; Financial Stability; Secondary Data Review

Dr Raghuveer R (2026); Financial Risk Management Practices in Indian Corporates: A Literature Review, International Journal of Research Culture Society,    ISSN(O): 2456-6683,  Volume – 10,   Issue –  2,  Available on – https://ijrcs.org/

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