Title: Relationship of Nifty 50 and Piramal Enterprises Limited
Author: Praharsh Raj Singh
Introduction of Company:
The Piramal Group is an Indian multinational diversified global business conglomerate, that
has presence across various sectors such as healthcare, life sciences, drug discovery,
healthcare information management, financial services and real estate.
The Piramal Group comprises 3 key companies: Piramal Enterprises Ltd, Piramal
Realty and Piramal Foundation. Piramal Enterprises Limited formerly known as
Piramal Healthcare Ltd, is the largest company of Piramal Group, and is active in business
verticals including Healthcare, Life sciences, Information management, and financial
services. Piramal Enterprises is listed at both Bombay Stock Exchange and National Stock
Exchange.17 Fortune 500 ranked Piramal Healthcare in the top-50 largest corporations
across India. The UN Conference on Trade and Development’s World Investment Report 2011 ranked the group among the top 5 pharmaceutical contract manufacturers in the
world.
The Piramal Foundation is a private philanthropic foundation established in 2006.
Piramal Foundation has undertaken projects like Piramal Swasthyal(a health information
help line service called Arogya Vani in the state of Karnataka), Sarvajal [221 (provides clean
water in India through solar powered water ATMs), source for change 1231 (rural BPO for
rural youth in Bagar, Rajasthan), Pratham (24) (delivers education to under privileged
children), Piramal foundation for education leadership (Piramal Fellowship and Principal
Leadership Development program (PLDP) are the two programs undertaken) and Piramal
Prize.
Objective: To calculate the beta of Piramal Enterprises Limited and find its significance.
View and Reviews:
• Piramal Enterprises Ltd jumps 3.78%, up for five straight sessions.
• Piramal Capital ties up with IMGC to offer home loans of Rs 5-75 lakh.
• Piramal Enterprises to raise up to Rs 500 cr via NCDs.
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 data analysis technique.
• The company data is independent variable (Y) whereas the Nifty 50 data is dependent variable (X).
Data Analysis:
Y= 0.213702 – 0.925291 X
Where Y= Piramal Enterprises Limited Weekly Returns.
In the data, n= 47; R^2= 0.151565593; F-stat= 8.038867394
The above regression equation tells us the relationship between X and Y, where Y= Piramal Enterprises Limited and X= Nifty 50 prices.
The negative sign tells us there is indirect relationship between them, if the price rises of Nifty 50 then the price of Piramal Enterprises Limited declines and vice versa.
R^2 is 0.151565593 which means 15.16% of Y is explained by X and the balance is error.
F= 8.0388 which is more than the table value, which means overall the model is statistically significant at 5% level.
Conclusion:
Based on the research methodology and data analysis performed we can conclude that only 15.16% of Piramal Enterprises Limited can be explained by Nifty 50 and the remaining is attributed to the fundamentals and the policies of Piramal Enterprises Limited.
Since F value is greater than the table value, b value is significant. The model can be relied upon to analyse the risk factors and the analysis can depend on this model.