Topic Name: Relationship of JM Financial Limited with NIFTY.
Author: Janhavi Jagdale, Kohinoor Business School, MMS First Year, Batch B
Roll No. : 0222085
Introduction: JM Financial is an integrated and diversified financial services group. The Group’s primary businesses include (i) Investment Bank (IB) shall cater to Institutional, Corporate, Government and Ultra High Net worth clients and includes investment banking, institutional equities and research, private equity funds, fixed income, syndication and finance; (ii) Mortgage Lending includes both wholesale mortgage lending and retail mortgage lending (affordable home loans and secured MSME); (iii) Alternative and Distressed Credit includes the asset reconstruction business and alternative credit funds; and (iv) Asset management, Wealth management and Securities business (Platform AWS) shall provide an integrated investment platform to individual clients and includes wealth management business, broking, PMS and mutual fund business.
As of March 31, 2023, the consolidated loan book stood at ~Rs. 156.5 BN, distressed credit business AUM at ~Rs. 135.6 BN, wealth management AUM at ~Rs. 815.7 BN, mutual fund AAUM at ~Rs. 29.7 BN.
Objective: To calculate beta of JM Financial Limited and find out its significance.
Views & reviews:
Mr. Vishal Kampani, Non Executive Vice Chairman, JM Financial Limited.
Mr. Vishal Kampani’s stakeholder message celebrates JM Financial Group’s 50th year, spotlighting resilience in a volatile global economy. With FY 2022-23 consolidated revenue of `3,343 crore and a robust 20.3% YoY loan portfolio growth, the company’s financial strength is evident. Embracing technology, an investment in Platform AWS aims to bolster digital capabilities and asset management. Kampani expresses gratitude for stakeholders’ vital role and looks forward with optimism, emphasizing growth, innovation, and ongoing value creation. The address encapsulates a journey marked by adaptability and sets a positive tone for the company’s future endeavors.
Mr. Atul Mehra, Joint Managing Director, JM Financial Limited
India’s remarkable growth and stability have firmly established it as the world’s fastest-growing economy. JM Financial finds itself at the nexus of history and progress, having evolved into a trusted partner over five decades, driving innovation and transition. Embracing digital transformation with exceptional talent and strong governance, the company is poised to seize this golden opportunity while strengthening its diverse portfolio. Looking forward, JM Financial is primed to shape a future of sustainable growth, delivering enduring value to stakeholders under the guidance of Mr. Atul Mehra.
Data Collection:
Data is taken from 01-07-2022 to 30-06-2023. It has been downloaded from NSE Website, weekly closing prices were found out then weekly return of NIFTY and weekly return of JM Financial LYD. were calculated. NIFTY return is taken as “X” and KM Financial LTD. return as “Y”.
Data Analysis: –
Equation “Y= 0.1370+0.9269 (X)”
(tstat = 2.4141)
n = 50, R2 = 0.108271, F = 5.827996
The above equation shows the relationship between the closing price of Nifty 50 (x) and the closing price of JM Financials LTD. (y) the positive sign means a positive relationship meaning if “x” rises “y” rises and vice versa. If “x” rises by 1 unit, “y” rises by 0.9269, “n” means there are 50 observations. The t-stat for b is 2.4141, which means b is statistically significant at 5% level. R2 is 0.108271 means 10.82% of y is explained by x, balance 89.18% is error due to the variables which are not in model. As the calculated value of F =5.827996 is more than the tabulated F (F 0.05,1DF,48DF) = 4.043, 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 0.9269 which is less than 1, the share is good for long term.