Title: – Relationship of Aditya Birla Capital Ltd with Nifty 50
Author: – Ananya Anil Kumar (MMS First Year, Roll no. 0222031)
Kohinoor Business School, Kurla.
Introduction: – Aditya Birla Capital Limited (“ABCL”) is the holding company for the financial services businesses of the Aditya Birla Group.
With subsidiaries/JVs that have a strong presence across Protecting, Investing and Financing solutions, ABCL is a financial solutions group that caters to the diverse needs of its customers across their life cycle. Powered by more than 38,000 employees, the businesses of ABCL have a nationwide reach with over 1,331 branches, more than 2,00,000 agents / channel partners and several bank partners.
As of June 30, 2023, Aditya Birla Capital Limited manages aggregate assets under management of about Rs. 3.9 lakh Crore with a consolidated lending book of over Rs. 1 lakh Crore through its subsidiaries and joint ventures.
Aditya Birla Capital Limited is a part of the global conglomerate Aditya Birla Group, which is in the league of Fortune 500. Anchored by an extraordinary force of over 185,000 employees belonging to 100 nationalities, the Group is built on a strong foundation of stakeholder value creation. With over seven decades of responsible business practices, the Group’s businesses have grown into global powerhouses in a wide range of sectors – metals, pulp and fibre, chemicals, textiles, carbon black, telecom, cement, financial services, fashion retail and renewable energy. Today, over 50% of the Group’s revenues flow from overseas operations that span 36 countries in North and South America, Africa, Asia, and Europe.
Objective: – To Calculate the Beta of Aditya Birla Capital Ltd and find out its significance.
Views and Reviews: –
The revenue grew by 27% y-o-y to ₹29,999 Cr in FY23 and consolidated profit after tax, excluding the fair value gain related to Health insurance business, grew 33% y-o-y to `2,057 Cr in FY23. The strong momentum across businesses led to a 40% y-o-y growth in the overall lending book (NBFC and HFC) to `94,364 Cr as on March 31, 2023 and a 28% y-o-y growth in the gross premium (Life and Health Insurance) to `17,787 Cr in FY23.
On 11th May 2023, the Board of Directors have approved the raising of funds, inter alia, by way of issuance of Equity Shares, global depository receipts, American depository receipts, foreign currency convertible bonds fully/partly convertible debentures, non-convertible debentures, and/or any other financial instruments convertible into equity shares (including warrants, or otherwise, in registered or bearer form) and/ or any security convertible into equity shares or combination of any of the aforementioned securities in one or more tranches through one or more public and/ or private offerings including by way of a qualified institutional placement or any combination thereof or any other method as may be permitted under applicable laws to eligible investors and in such manner and on such price, terms and conditions, in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended and applicable provisions of the Companies Act, 2013 and rules issued thereunder, as amended in each case, the enabling provisions of the Memorandum and Articles of Association of the Company and any other provisions of applicable laws, for an aggregate amount not exceeding ` 3,000 Crore (Rupees Three Thousand Crore Only) subject to such regulatory/ statutory approvals as may be required, including the approval of the Shareholders of the Company in the general meeting.
Data Collections: – Data is taken from 01-07-2022 to 30-06-2023. It has been downloaded from the NSE site, then Friday’s closing price was sorted and weekly returns of Nifty (i.e. X) and Jubilant Foodworks (i.e. Y) were calculated.
Data Analysis: – Equation “Y=-1.5489-0.2389)(X)”
(tstat = -0.6064)
n = 50, R2 = 0.008 , F = 0.3677
The above equation shows the relationship between the closing price of Nifty 50 (x) and the closing price of Aditya Birla Capital LTD. (y) the negative sign means a negative relationship meaning if “x” rises “y” rises and vice versa. If “x” rises by 1 unit, “y” rises by -0.2389, “n” means there are 50 observations. The t-stat for b is -0.6064, which means b is statistically significant at 5% level. R2 0.008 is means 0.8 % of y is explained by x, balance 99.2 % is error due to the variables which are not in model. As the calculated value of F=0.3677 is more than the tabulated t(t1,49DF) =4.388, the overall model is statistically significant at the 5% level.
So overall the model is statistically significant at the 5% level.
Conclusion:
If b<1, Aditya Birla Capital Ltd share is good for short term investment.