Title: Calculation of Beta of Nippon Life India Asset Management Ltd and its significance
Author: NANDHAKUMAR G
INTRODUCTION
NAM India, promoted by Nippon Life Insurance, is one of the largest AMCs in India. NAM India endeavors to create and nurture a world-class, performance-driven, and socially responsible ecosystem aimed at consistently delighting investors and other stakeholders. The aim is to increase AUM, gain market share across segments and improve operating margins, leading to increased profitability.
OBJECTIVE
To calculate Beta of Nippon Life India Asset Management Ltd and its significance.
DATA COLLECTION
Data of Nippon Life India Asset Management Ltd from 01-12-2021 to 30-11-2022 from NSE website
• Friday weekly closing prices has been found out
• Weekly Return have been calculated with the formula of (Y2-Y1)/Y1*100
• Weekly Return of Equity have been regressed on Weekly Return of Nifty
DATA ANALYSIS
Weekly Return of Nippon Life India Asset Management Ltd = 0.899 + 1.027 Weekly Return of Nifty + E
• t-stat = 5.434
• R2 = 0.386
• F = 29.534
• N = 49
The above equation tells us about the relationship between Weekly Return of Nippon Life India Asset Management Ltd and Weekly Return of Nifty. The positive sign means that there is a direct relationship. If nifty rises, equity rises and if nifty falls, equity falls. The co-efficient of weekly return of nifty is 1.027, which means if nifty rises by 1 unit, Nippon Life India Asset Management Ltd will rise by 1.027 units and vice versa.
Number of Observations are 49 and t-stat is 5.434.
P value is 0, which is less than 0.05, means that b is statistically significant at 5%. Even it is less than 0.01, b is statistically significant at 1% level.
R2 is 0.386, which means that 38.6% of Y (Nippon Life India Asset Management Ltd) is explained by X (nifty), balance of 61.4% is error. Error is due to the variables which are not in the model.
F is 29.534, the P value for which is 0 < 0.01, means overall the model is statistically significant.
CONCLUSION
Since b = 1.027 is greater than 1, it is statistically significant.
Nippon Life India Asset Management Ltd. is a good option for investment because for every increase in nifty there will an increase in the equity of Nippon Life India Asset Management Ltd.