Topic: Relationship of Axis Bank Ltd with Nifty 50
Author: Aayush Borulkar (Roll No.0222009)
Introduction: – Axis Bank Ltd. is a prominent Indian financial institution that operates in the banking and financial services sector. Established in 1993 as UTI Bank, it underwent a name change to Axis Bank in 2007. The bank’s headquarters are in Mumbai, Maharashtra, India.
Axis Bank offers a wide range of financial services to individuals, corporations, and institutions. These services include retail banking, corporate banking, treasury operations, and various financial products. The bank has a significant presence across India, with a network of branches and ATMs in various cities and towns, providing convenient access to its customers.
Over the years, Axis Bank has gained recognition for its innovative and customer-centric approach. It has implemented technology-driven solutions to enhance its banking services, including internet banking, mobile banking, and digital payment systems. The bank has also embraced sustainability practices and corporate social responsibility initiatives, contributing to various social and environmental causes.
Axis Bank’s growth and performance have positioned it as one of the leading private sector banks in India. It has received several awards and accolades for its services, operational excellence, and commitment to customer satisfaction. As of my last knowledge update in September 2021, Axis Bank continues to play a significant role in the Indian banking landscape.
Objective: To calculate the beta of Axis Bank Ltd and find out its significance.
Views and reviews
Amitabh Chaudhry, CEO, Axis Bank Ltd. says the bank is expanding the physical infrastructure and spending a lot of money digitally to ensure that “we can reach out to more customers, and as that happens, it will continue to give a flip to deposit growth. But right now, deposit growth is a problem in the system, and we do need to solve it”.
Data Collection
The data for the period July 1, 2022 to June 30, 2023 has been downloaded from NSE’s website and Friday’s closing price was found out. The weekly returns of Nifty 50 are represented as X and that of Axis Bank Ltd as Y.
Data Analysis
Y = 0.46 + 1.12X
tstat = (4.31)
N = 50
R2 = 0.28
F = 18.61
The above equation shows the relationship between Nifty 50 (X) and Axis Bank Ltd (Y). The positive sign means there is a positive relationship, which means, if X rises then Y also rises and vice-versa. If Nifty 50 (X) rises by 1 unit, Axis Bank Ltd (Y) rises by 1.12 units. N means there are 50 observations. The t-stat for b is 4.31, which means b is statistically significant at 5% level. R2 = 0.28 means that 28% of Axis Bank Ltd (Y) is explained by Nifty 50 (X) and the balance 72% is error due to the variables which are not in the model.
Since the F = 18.61 which is more than the tabulated F value (F 0.05,1DF,48DF = 4.043), the overall model is statistically significant at 5% level.
Conclusion
Since the beta of Axis Bank Ltd is 1.12, the shares of the company is good for a short-term investment. This is because b>1.