BUSINESS RESEARCH METHODOLOGY ICA
Student Name SAP-ID Faculty
Nihhar Nimish Tated 80012100955 Dr. J.K Sachdeva
Introduction
The National Thermal Power Corporation Limited, formerly known as NTPC Limited, is an Indian statutory corporation. It was involved in the generation of energy and other related operations. It is a statutory corporation established under the Companies Act of 1956 and is owned by the Ministry of Power, Government of India. The company’s headquarters are located in New Delhi. The primary duty of NTPC is to generate and distribute power to India’s State Electricity Boards. The organisation also does consultation and turnkey project contracts involving engineering, project management, construction management, and power plant operation and management.
The organisation has also dabbled in oil and gas exploration and coal mining. It is India’s largest power corporation, having an electric power generation capacity of 67,907 MW (Megawatts). Despite having around 16% of total national capacity, the corporation contributes to more than 25% of total power output due to its emphasis on operating its power plants at better efficiency levels (approx. 80.2 percent against the national PLF rate of 64.5 percent). Currently, NTPC generates 25 billion units of energy every month.
NTPC now runs 55 power plants (24 coal plants, 7 combined cycle gas/liquid fuel plants, 2 hydro plants, 1 wind farm, and 11 solar projects). It also includes 9 coal and 1 gas stations that are held by joint ventures or subsidiaries. It was formed in 1975 by the Government of India, which today owns 51.1 percent of its equity shares (after divestment of its stake in 2004, 2010, 2013, 2014, 2016, & 2017)
The Union Government of India bestowed Maharatna status on NTPC in May 2010, making it one of just four corporations to get this honour. In 2016, it is rated 400th in the Forbes Global 2000.
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Objective
To calculate the beta value of the company with the help of its closing share prices focused on Fridays over a span of 1 year [From 1st March 2021 till 28th February 2022] and find its significance.
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Recent news and trends with regards to NTPC
• Commodity crunch reinforces NTPC’s unique position in India’s power sector
NTPC’s one-year stock returns pale in comparison to its private sector peers Tata Power Co, JSW Energy and Adani Power. But repeated commodity price shocks and India’s continuing dependence on conventional energy is cementing NTPC’s position as the country’s foremost power producer. The company is aggressively building its renewable energy portfolio and plans to list the unit on the stock exchanges. If NTPC executes its plans well, then NTPC’s stock can well catch up with private sector peers on the returns’ front.
• Part of Asia’s largest coal conveyor belt has become operational: NTPC
At a time when efforts are on for gradual phasing out of coal, India’s largest thermal power producer, the National Thermal Power Station (NTPC), has decided to make coal and associated operations in Jharkhand as clean as possible. As part of the move, the coal and power major has started operating on a part of Asia’s longest conveyor belt — 21km long and 12-feet wide — to ferry coal from its Pakri-Barwadih mines in Hazaribag to the Banadag railway siding. From the Banadag railway siding, coal is transported to various destinations across the country.
• Inclusive Role of Women highlighted at NTPC Bongaigaon Power Station
As a part of celebration, more than 50 women from nearby villages have undergone a four-day training on enhancing entrepreneurship skills by Bardwi Shikla Ladies Club, NTPC Bongaigaon in association with Assam Agricultural University, Jorhat.
• NTPC completes trial of unit-3 of Nabinagar Power Generating Company
State-owned NTPC Limited on Wednesday announced that unit-3 of the 660 MW capacity of Nabinagar Power Generating Company Limited has successfully completed the trial operation and consequently included in the installed capacity of the group. With this, the total installed capacity of NTPC Group has reached a level of 68,567.18 MW, NTPC said in a statement.
• NTPC generates nearly 315 billion units of power so far in FY22
The rise in power generation indicates both improvement in performance and an increase in demand for power in the current year, said a company statement.NTPC Korba (2600 MW) in Chhattisgarh was the top performing thermal power plant in India with 94.32% plant load factor between April-January FY22, as per the data published by Central Electricity Authority.
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Data collection
Data of index and equity were collected from the following two websites:
• https://www1.nseindia.com/
• https://www.nseindia.com/
Daily returns from 1st March-2021 to 28 Feb-2022 were downloaded in excel format from these websites and they were sorted into weekly format. Then weekly returns were calculated for both index and equity and then regression analysis was done. This process was done for both; NTPC and Nifty50.
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Data analysis
• Predicted Y =0.15744+0.0815X
• N=47
• R Square= 0.02297
• F= 1.03422
• T-stat(beta) = 1.01696711458055
• T-stat (0.05,45) = 2.0141
• The above regression equation tells us the relationship between X and Y. Where X is NIFTY’s weekly returns and Y is NTPC Ltd.’s weekly returns.
• The positive sign of Beta-value tells us the that there is a positive relationship between NIFTY and NTPC Ltd.’s weekly returns.
• From the equation, it can be seen that if X rises by 1 unit, Y will rise by 0.23894 units.
• T calculated is more that T tabulated which means, β is statistically significant at 5% confidence level.
• R^2 is 0.02297 which means 2.297% of Y (NTPC Ltd) is explained by X. And the balance is explained by error.
• F is 1.03422 which is way less than table value which means model is statistically insignificant at 5% level.
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CONCLUSION
β is statistically insignificant in case of NIFTY and NTPC ltd. Also, it can be concluded that NTPC ltd HAS a low beta in terms of its share closing prices.
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