With the advancement in technology, the electricity demand is increasing day by day. Power supply utilities are facing the problem to expand their network owing to the problems like availability of land in urban areas and Right of Way (ROW). Due to these problems, many of the existing lines are operating nearer to their thermal stability limit. Maintaining the voltage within the limits will be a challenging task for the utilities. Increased loading of the lines is making the power system to the verge of voltage stability. Many indices are proposed in the literature for predicting the voltage stability of the system. In this paper, L-Index is used for voltage stability analysis of the radial distribution system. L-Index sensitivity method is used to the locate and size the reactive power compensation devices. The effectiveness of L-Index sensitivity method on the larger power system like IEEE-33 bus system is presented in this paper and simulation studies are performed using MATLAB/SIMULINK.