TITLE: Relationship of Nifty and Axis Bank
AUTHOR: Adyasha Panigrahi
SAP ID- 80012100092
Introduction
Axis Bank Limited, formerly known as UTI Bank (1993–2007), is an Indian banking and financial services company headquartered in Mumbai, Maharashtra. It sells financial services to large and mid-size companies, SMEs and retail businesses.
As of 30 June 2016, 30.81% shares are owned by the promoters and the promoter group (United India Insurance Company Limited, Oriental Insurance Company Limited, National Insurance Company Limited, New India Assurance Company Ltd, GIC, LIC and UTI). The remaining 69.19% shares are owned by mutual funds, FIIs, banks, insurance companies, corporate bodies and individual investors.
OBJECTIVE: To calculate Beta Value of AXIS BANK and find its significance.
DATA COLLECTION: The data of NIFTY and Axis Bank was collected through NSE Website and was downloaded from 1-March-2021 to 28-February-2022 in an excel sheet. The closing prices were found out. The data was filtered on weekly basis and then weekly returns of both NIFTY and AXIS BANK was calculated. The company returns have been regressed on nifty’s returns.
DATA ANALYSIS:
Predicted Y = -0.027243 + 1.816557 X
N=46, R Square= 0.052506, F= 2.438292
Tstat(beta)= (1.219766)
Tstat (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 Axis Bank’s weekly returns.
The positive sign of Beta tells us the that there is a positive relationship between NIFTY and Axis Bank’s weekly returns.
From the equation, it can be seen that if X rises by 1 unit, Y will rise by 0.096034 units.
T calculated is more that T tabulated which means, β is statistically significant at 5% confidence level.
R^2 is 0.0525 which means 5% of Y (Axis Bank) is explained by X. And the balance is explained by error.
F is 4.43 which is more than table value which means model is statistically significant at 3.8% level.
CONCLUSION:
β is statistically significant in case of NIFTY and Axis Bank. Also, it can be concluded that Axis Bank is a low beta share. Since it is less than 1.