Penugonda was the second capital of the Vijayanagar Empire.

Background:
The Vijayanagar Empire was one of the most powerful and prosperous empires in South India. It was established in 1336 by two brothers, Harihara and Bukka, under the guidance of their spiritual guru, Vidyaranya. The empire reached its zenith under the reign of Krishnadevaraya.

First Capital:
The first capital of the Vijayanagar Empire was Hampi. Hampi was strategically located on the southern bank of the Tungabhadra River, surrounded by hills and natural defenses. It became a thriving center of trade, culture, and architecture during the empire's rule.

Reasons for Shifting:
There were several reasons behind the shift of the capital from Hampi to Penugonda:

1. Strategic Location: Penugonda was situated on the banks of the Krishna River, which provided easy access to the eastern regions of the empire. This location offered better defense against potential invasions from the eastern kingdoms.

2. Trade and Commerce: Penugonda was strategically positioned on the trade route connecting the eastern and western coasts of India. This facilitated the empire's trade and commerce activities.

3. Political Stability: The empire faced internal conflicts and rebellions during the later years of its rule. Shifting the capital to Penugonda was seen as a way to establish political stability and strengthen the empire's control over the eastern regions.

4. Administrative Convenience: Penugonda was a well-established city with a developed infrastructure. It had a systematic layout and well-planned administrative structures, which made it convenient for the empire's administration.

Impact:
The shift of the capital to Penugonda had a significant impact on the empire:

1. Trade and Economy: Penugonda's strategic location enhanced the empire's trade and economic activities. The city became a hub for merchants and traders from various regions.

2. Cultural Exchange: The relocation of the capital brought about a cultural exchange between the people of Hampi and Penugonda. This exchange led to the amalgamation of various art forms and architectural styles.

3. Administrative Reforms: The administrative structures in Penugonda were further strengthened to ensure efficient governance. The empire implemented various reforms to maintain law and order and promote welfare activities.

In conclusion, Penugonda served as the second capital of the Vijayanagar Empire due to its strategic location, trade opportunities, political stability, and administrative convenience. The shift to Penugonda had a positive impact on the empire's economy, culture, and administration.