• Title : Relationship of Kotak Mahindra Bank with Nifty
• Author :Komal Manoj Patil – JDBIMS – MBA Finance
• Introduction : In 1985, Uday Kotak founded an Indian financial services conglomerate which later In February 2003, received a banking licence from the Reserve Bank of India as Kotak Mahindra Finance Ltd. KMFL became the first non-banking finance company in India to be converted into a bank. It offers banking products and financial services for corporate and retail customers in the areas of personal finance, investment banking, life insurance, and wealth management. Kotak Mahindra Bank is the third largest and private bank in India, in terms of market capitalization.
• Objective :
To Calculate the beta of Kotak Mahindra Bank and see its significance
• Data Collection :
I. Secondary Research was done in order to collect relevant data about the bank’s financial performance along with NIFTY 50 data.
II. The data of the company and Nifty 50 has been downloaded from nseindia.com
III. The data of the company was regressed with Nifty 50 using data analysis technique.
IV. Independent Variable (X) – Nifty Data & Dependent Variable (Y) – Company data
• Data Analysis :
Y^ = – 0.3671 + 0.9946 x
In the data, n = 45 ; R^2= 0.302103312 ; F Value = 18.6137
The above regression equation tells us the relationship between X and Y.
From the equation, it can be seen if X rises by 1 unit, Y will fall by 0.99 units and viceversa
The figure in bracket is t-stats for b (4.3144), which is less than the table value , which implies that b is not statistically significant at 5% level.
R^2 is 0.302103312 which means 30.21% is of Y is explained by X and the balance is error.
F = 18.6137 which is less than the table value, which means overall model is not significant at 5% level
• Conclusion :
We can conclude based on the data analysis performed, that only 30% of Kotak Mahindra Bank Limited can be explained by Nifty 50 and the policies of Kotak Mahindra Bank Limited is responsible for the remaining . b value is not significant because the F value is lesser than table value.