Shareholder value creation has become the need of the day for every firm. Every firm has to construct a corporate capital structure with the objective of shareholders’ wealth maximization because they are the ultimate owners of the enterprises. Diversified sector is a capital intensive sector, where greater importance has been given in designing the capital structure. Hence, the present paper makes an attempt to examine the impact of leverage on shareholder value creation metrics, namely, Economic Value Added and Market Value Added of Diversified sector for the period 1995-96 to 2009-10. A panel data approach has been applied to analyse the data. The study reveals that the leverage has a significant influence on shareholder value creation.