Title: Relationship of Nifty 50 and Voltas Limited
Author: Atharva Iwarkar
Introduction of Company:
Adani Power Limited (APL), a part of the diversified Adani Group, is the largest private thermal power producer in India. We have a power generation capacity of 12,450 MW comprising thermal power plants in Gujarat, Maharashtra, Karnataka, Rajasthan, and Chhattisgarh and a 40 MW solar power project in Gujarat.
We were the world’s first company to set up a coal-based Supercritical thermal power project registered under the Clean Development Mechanism (CDM) of the Kyoto protocol. Being a new entrant to power generation in 2006, we leveraged the project management skills of the Adani Group to set up our first power plant at Mundra successfully and efficiently.
The power sector in India has undergone a challenging period in the past few years, which put to test the resilience of our business model. By navigating the challenges through prudence, persistence and discipline, we have implemented the best available technologies and practices that can serve as benchmarks for the power industry.
As we augment our generation capacity, both organically and inorganically, we also strive to make our footprints sustainable. Receiving a percentile score of 65 for Adani Power in Corporate Sustainability Assessment by DJSI-S&P Global and a leading position in India and number 30th in the world in ESG benchmarking for 2019 makes us more committed to Growth with Goodness. This ESG score is a testimony of the company’s corporate sustainability practices.
Objective: To calculate the beta of Adani Powers and find its significance.
View and Reviews:
• Adani Power stock price surges 14% after SC orders 3 discoms to pay a compensatory tariff of Rs 4,200 crore
• Adani Power Consolidated December 2021 Net Sales at Rs 5,360.88 crore, down 22.25%
• Adani Power completes acquisition of Essar’s 1,200 MW Mahan project in MP
Data Collection:
• The data of the company and Nifty 50 (index) has been downloaded from nseindia.com.
• The Friday returns were then calculated as per the weekday.
• The data of the company was then regressed with Nifty 50 by using the data analysis technique.
• The company data is the dependent variable (X) whereas the Nifty 50 data is the independent variable (Y).
Data Analysis:
Y^= 0.011905 + 1.660523X
Where X= Adani Powers.
In the data, n= 47; R^2= 0.113735; F-stat= 5.646555251
The above regression equation tells us the relationship between X and Y, where Y= Adani Powers and X= Nifty 50 prices.
The positive sign tells us there is a direct relationship between them, if the price rises of Nifty 50 then the price of Adani Power also rises and vice versa.
R^2 is 0.113735 which means 11.3% of Y is explained by X and the balance is an error.
F= 5.64 which is more than the table value, which means overall the model is statistically significant at a 5% level.
Conclusion:
Based on the research methodology and data analysis performed we can conclude that only 11.3% of Adani Power can be explained by Nifty 50 and the remaining is attributed to the fundamentals and the policies of Adani Power.
Since the F value is greater than the table value, the b value is significant. The model can be relied upon to analyse the risk factors and the analysis can depend on this model.