Title: CALCULATION OF BETA OF NARAYANA HEALTH ((Narayana Hrudayalaya Limited) AND ITS SIGNIFICANCE
Author: Nisha.V
Introduction: Narayana Health (formerly known as Narayana Hrudyalaya) is an Indian chain of multi-specialty hospitals, heart centers, and primary care facilities with its headquarters in Bengaluru, India. It was founded by Dr. Devi Shetty in the year 2000. Narayana Hrudyalaya was listed on the BSE and the NSE on 6 January 2016. Upon debut, the company was valued at over US$1 billion.
Objective: To calculate beta of Narayana Health and its significance
Data Collection: Data of Narayana Health (Narayana Hrudayalaya Limited) from 01-12-2021 to 30-11-2022 downloaded 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 = 1.240- 0.54884Weekly Return of Nifty + E
• t-stat = -2.205470214
• R2 = 0.09378547
• F = 4.864098865
• N = 49
The above equation tells us about the relationship between Weekly Return of Narayana Health Weekly Return of Nifty. The negative sign means that there is a inverse relationship. If nifty rises, equity falls and if nifty falls, equity rises. The co-efficient of weekly return of nifty is -0.54884, which means if nifty rises by 1 unit, Narayana Health will fall by 0.54884 units and vice versa.
• Number of Observations are 49 and t-stat is -2.205470214
• P value is 0.032348, 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 0.09378547, which means that 9.3% of Y (Narayana Health) is explained by X (nifty), balance of 90.7% is error. Error is due to the variables which are not in the model.
• F is 4.864098865, the P value for which is 0.032348 > 0.01, means overall the model is statistically insignificant.
Conclusion:
Since b = -0.54884 is less than 1, it is statistically insignificant.
Narayana Health is not a good option for investment because for every increase in nifty there will a decrease in the equity of Narayana Health.