RVNL
Topic Name: Relationship of RVNL with Nifty 50
Author: Rohit Thorat
(MMS Batch, Roll No: 59)
Introduction:
Rail Vikas Nigam Limited (RVNL) is a public sector company in India that primarily focuses on the development and execution of railway infrastructure projects. It was incorporated by the Ministry of Railways in 2003 as a special purpose vehicle (SPV) to expedite the implementation of critical rail projects across the country. The main objective of RVNL is to enhance and modernize the railway network, improve its efficiency, and contribute to the growth of the Indian railway system. The company is responsible for undertaking various railway projects, including laying new railway lines, doubling and electrification of existing lines, construction of bridges and tunnels, and other infrastructure works.
Objective: To calculated beta of RVNL and find out its significance.
Views & Reviews:
Chairman
Shri Pradeep Gaur `
- All the achievements of RVNL, would not have been possible without the wholehearted support provided by Indian Railways. I am also grateful for the encouragement and confidence reposed in RVNL by the Chairman and Members of the Railway Board and other officers, that helped RVNL in contributing substantially to the development of rail infrastructure in the Country. I, express my sincere thanks to our esteemed Shareholders, Ministry of Finance, Department of Public Enterprises, Ministry of Heavy Industries.
- The State Governments, Zonal Railways, ADB, IRFC, Financial Institutions, C&AG’s office, our bankers and stakeholders in various railway projects and national and international contractors for their unstinted cooperation to RVNL. I would also like to place on record my deep appreciation for the devotion and dedication of all my fellow RVNL employees who have been pillars of strength for the Company and have delivered their best despite various challenges.
Data Collection:
The data for 01-07-2022 to 30-06-2023 has been download from NSE site and weekly closing prices were found out and weekly returns of nifty and weekly returns of RNVL were calculated. Nifty returns were taken as X and Nifty returns were taken as Y. Y was regressed on X and then data analysis.
Data Analysis:
Equation “Y= -2.7525 + 0.8620 X”
(tstat= 1.1234)
n = 50, R2 =0.0261, F = 1.2620
The above equation shows the relationship between the closing price of Nifty 50 (x) and the closing price of RNVL. (y) the positive sign means a negative relationship meaning if “x” rises “y” rises and vice versa. If “x” rises by 1 unit, “y” rises by (-0.0085), “n” means there are 50 observations. The t-stat for b is 1.1234, which means b is statistically significant at 5% level.R2 is 0.0261 means 2.61% of y is explained by x, balance 97.39% is error due to the variables which are not in model. As the calculated value of F =1.2620 is more than the tabulated F(F 0.05,1DF,47DF)=4.047, 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 0.031736 which is less than 1, the share is good for long term.