Relationship of Kalyan Jewellers India Limited share with NIFTY50
Author: Kalpana Ghongade (0222016)
Introduction:
Kalyan Jewellers is an Indian chain of jewellery showrooms. It was founded by T. S. Kalyanaraman in 1993. The company opened its initial public offering on March 16, 2021, and was publicly listed on March 26, 2021. Initially, Kalyan Jewellers strengthened their presence in the South Indian states of Kerala, Tamil Nadu, Karnataka, Andhra Pradesh and Telangana. The Company also has strong roots in the textile trading, distribution and wholesale business. On March 11, 2021, Livemint reported that Kalyan Jewellers would be opening an initial public offering worth 1,175 crores on 16 March.
Objective:
To calculate the Beta of Kalyan Jewellers and observe its significance.
Views & Reviews:
Mr. Ramesh Kalyanaraman, the Executive Director of Kalyan Jewellers, recently discussed the growing challenge of fake news on social media with CNBC-TV18. He highlighted the advantage of customers’ ability to discern fact from fiction, showcasing their power to uncover authenticity. “Trust is the foundation of our brand at Kalyan Jewellers,” said Mr. Kalyanaraman. “We remain committed to our customers through our 4-Level assurance plan, which guarantees the quality, purity, and transparency our customers expect.”
As we complete 7 years in the state of Orissa, we are delighted to announce our foray into the state’s third-largest market. “We believe Brahmapur offers tremendous untapped potential and will help us boost growth momentum, on the back of our strong foundations laid in the Orissa market”, said Ramesh Kalyanaraman, Executive Director, Kalyan Jewellers, on the opening of the 161st showroom globally.
Data collection:
The data for the period 1/7/2023 to 30/6/2023 has been download from NSE site & weekly closing prices were found out. Then weekly return of Nifty50 and weekly return of Kalyan Jewellers of company were calculated. Nifty50 returns were taken as X and Kalyan Jewellers equity returns were taken as Y. Y was regressed on X.
Data analysis:
Y= -0.0153-0.0037X
( tstat -0.0063)
N=50 R2= 0.083 F=4.0476 Beta = -0.0037
Interpretation:
The above equation shows the relationship between Nifty50 (X) and Kalyan Jewelers (Y) .The negative sign means negative relationship, meaning if “X” rises “Y” fall and vice versa. If “X” rises by one unit Y falls by -0.003 units. N means there are 50 observations. Figure in bracket (-0.0063) is T stat for B. So B is statistically significant at 5% level. R2 is 0.0834 which means 8.43% of “Y” is explained by “X”, balance 91.5 is error due to the variables which are not in model. F is 4.0476 which are more than the table value so overall the model is statistically significant at 5% level.
Conclusion:
Since Beta is less than 1, Kalyan Jewellers India Limited shares are good for long-term investment.