Relationship Between PNB housing finance & Nifty-50
Author – Poonam Sharma
Introduction –
PNB Housing Finance Limited (PNB Housing) is a registered housing finance company with National Housing Bank (NHB) incorporated under the Companies Act 1956 and commenced its operations on November 11,1988. It is promoted by Punjab National Bank (PNB) which holds 32.8% of share capital in the company. The company offers its retail customers housing and non-housing loans. The company is also into construction finance loans to real estate developers for residential housing. PNB Housing Finance is a deposit taking Housing Finance Company. The company has a robust network of branches spread across the country which help its customers avail financial services (loans and deposits) seamlessly.
Objective –
Calculate the Beta of the “PNB Housing Finance” and see its significance.
Data Collection –
Firstly, we have downloaded the data of PNB housing finance Nifty-50 dated from 1st April 2021 to 31st March 2022 from the website of National Stock Exchange(nseindia.com), Nifty equity is download by CSV file. Firstly, we have taken the data of Nifty-50 and after deleting all the column except date and closing stock, we have added the weekday column in the data using weekday function of excel, then we have deleted all rows except the 5th day (Friday) rows. Then we have added another column named as Returns column where we have found the returns by using the values in closing stock column and named it as X (which will be X for regression also). Similarly repeating all these steps for our selected company, we named it as Y (which will be Y for regression also). Here is how we have collected the X and Y values.
Data Analysis –
We can write the equation in the form of Y = a + b(X)
Where, Y = PNB Housing Finance Returns
X = Nifty-50 Returns
a = intercept and b = slope
Hence, the equation becomes,
Y =1.5911+ (1.8176)*X
Voltas Returns = (1.5911) + (1.8176)*(Nifty-50 Returns)
(2.2995)
n = 44 R2 = 0.1118 and F = 5.2880
Conclusion –
The above equation tell us, the relationship between X & Y. If X rise by 1 unit Y will fall by 1.8176 vice versa given figure in 2.2995 is the T stat for b. P-value for which (0.02) which is less than 0.05, It means b is statistically significant at 5% level.
R2 is 0.118 which means 11% of Y is explained by X. F is 5.2280 and the value for which is 0.02, which is less than 0.05. It means the over all model is statistically significant at 5% level.
