Title: “Relationship of Kotak Mahindra Bank LimitedShares with Nifty 50”
Author: Kavita Shripat Gadhe (MMS First year, Roll no. 0222013)
Kohinoor Business School, Kurla.
INTRODUCTION
Kotak Mahindra Bank Limited is an Indian banking and financial services company headquartered in Mumbai. 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. It is India’s third largest private sector bank by market capitalisation after HDFC Bank and ICICI Bank. As of 31 March 2023, the bank has a national footprint of 1,780 branches and 2,963 ATMs.
OBJECTIVE
Calculate BETA of Kotak Mahindra Bank Limited and observe its significance.
VIEWS & REVIEWS
Uday Kotak (Managing Director & CEO)
In Uday Kotak’s message, he emphasizes the need for Kotak Mahindra Bank to navigate change while upholding its core principles. He likens institutions to collective efforts that strengthen over time and underscores the importance of product excellence, customer focus, and trust in building a sustainable future. Kotak highlights the bank’s transition from physical to ‘phygital’ and ‘digical’ approaches, acknowledging the rapid evolution of technology. He also aims to contribute to India’s economic growth while fostering a balanced financial sector. Uday Kotak reflects on the bank’s robust financial performance, ESG initiatives, and diversified financial services beyond traditional banking. His message encapsulates the bank’s adaptive spirit, commitment to principles, and vision for responsible growth in the ever-changing financial landscape.
Dipak Gupta
(Joint Managing Director)
Kotak Mahindra Bank showcased a positive outlook with strong financial performance. In FY 2022-23, consolidated Net Profit surged 23% YoY to ₹14,925 crore, and Return on Assets increased to 2.62%. Standalone Net Interest Margin rose to 5.33%, up by 72 basis points. Net Profit marked a substantial 28% YoY growth at ₹10,939 crore. The bank’s commitment to growth was evident in an 18% YoY increase in Net Advances, with 10% dedicated to unsecured retail advances and microfinance. CASA ratio reached 52.8%, CAR stood at 21.8%, and CET1 capital at 20.6%. The Kotak Group managed over ₹4,20,800 crore in AUM by March 31, 2023, showcasing impressive 125% YoY growth in alternate assets, amounting to ₹46,077 crore. The bank’s focus on ESG initiatives led to better ratings, awards, and engagement in education, healthcare, sports, and environmental sustainability. Initiatives like day care for new parents underscored their commitment to diversity and support. The bank’s approach encompassed mutual funds, insurance, investment banking, broking, advisory, and alternate assets.
DATA COLLECTION
The data for this period has been download on NSE India site and weekly closing prices were found out. Weekly returns of Nifty 50 and weekly returns of Kotak Mahindra Bank Limited were calculated Nifty 50 returns were taken as X and equity returns Y (Y was regressed on X)
DATA ANALYSIS
Equation “Y= (-0.0976)+80.6066(X)”
(tstat =)4.3993895
n = 50, R Squar = 0.28735 F = 19.35463
The above equation shows the relationship between the closing price of Nifty 50 (x) and the closing price of Kotak Mahindra Bank Limited(Y) the negative sign means a negative relationship meaning if “x” rises “y” falls and vice versa. If “x” rises by 1 unit, “y” falls by 0.806066173 , “n” means there are 50 observations, and figures in brackets are tstat for “b”, so “b” is not as Calculated tstat for b i.e. 4.3993895 is higher than tabulated t(t0. 5,49DF=1.677) so reject H0 and accept H1. R2 is 0.287354 means 28.73% of y is explained by x 71.27%. As the calculated value of F =19.35463 is more than the tabulated F (F 0.05,1DF,49DF) = 4.038, the overall model is statistically significant at the 5% level.
So overall the model is statistically significant at the 5% level.
CONCLUSION
As Beta is 0.806066173 which is less than 1 So, this share is good for long term not for short term. B<1