This paper proposes to find out the differences in Debt Capacity of diversified and concentrated firms in the Indian context, from FY 2009-10 to FY 2015-16. Sales based Hirfindahl Index is used to differentiate firms as diversified and concentrated firms. The factors that determine the debt capacity such as Asset tangibility, Firm size, Market to book ratio and Profitability are used to find the differences in leverage of diversified and concentrated firms and applied Cross sectional regression analysis. The results confirm the earlier findings on debt capacity and diversified firms have 1 to 2 percent more to explain the variation in leverage than the concentrated firms. © Serials Publications Pvt. Ltd.