Title: “Relationship of AU Small Finance Bank LTD. Shares with Nifty50.”
Author: Abhishek Kadam (MMS First Year, Roll no. 0222020)
Kohinoor Business School, Kurla.
Introduction:
AU Small Finance Bank LTD. is a scheduled commercial bank and a Fortune India 500 Company. With 25+ years legacy of being a retail focused and customer centric institution, the company started its banking operation in April 2017. In 5 years of starting as a bank, it has established operations across 989 Banking Touchpoints serving over 20 Lakh+ customers in 20 states and 2 Union Territories of India with a talent base of 29,000+ employees.
Objective: – To Calculate the Beta of AU Small Finance Bank LTD. and find out its significance.
View:
Mr. Sanjay Agarwal, MD & CEO, AU Bank – recently turned 50, he envisaged the ‘I Care’ initiative as a gesture to express his gratitude to the frontline employees of AU Bank, an organization celebrating it’s 25 years of building trust. Under this initiative, he presented AU Bank employees with helmets, urging them to ride responsibly towards the wellbeing of their families and communities. Flagged off at AU Bank’s Corporate Headquarters in Jaipur in October 2020, the initiative has reached over 6,700+ Bank’s employees across all states in India.
Review:
Matthew Chris Baji, recommends AU Small Finance Bank (BKC Branch) –
There is no amount of thanks that will be enough for what you have done for me and my family, but I promise I will speak of your honesty and dedication. This is dream come true for me for finding a legit account manager like you.
Data Collections: – Data is taken from 01-06-2022 to 31-07-2023. It has been downloaded from the NSE site. Then Friday’s closing price was sorted and weekly returns of Nifty (i.e. X) and AU Small Finance Bank LTD. (i.e. Y) were calculated.
Data Analysis: – Equation “Y = -0.4724+0.0890 (X)”
(tstat = 0.2454)
n = 50, R2 = 0.0012, F = 0.0602
The above equation shows the relationship between the closing price of Nifty 50 (x) and the closing price of AU Small Finance Bank LTD (y). The positive sign means there is a positive relationship, meaning if ‘x’ rises then ‘y’ also rises and vice versa. If ‘x’ rises by 1 unit, ‘y’ rises by 0.0890, ‘n’ means there are 50 observations. The tstat for b is 0.2454, which is lower than tabulated t(t0.5,49DF=1.677), which means b is not statistically significant at 5% level. R2 is 0.0012, which means 0.12% of y is explained by x. As the calculated value of F = 0.0602 is less than the tabulated F (F 0.05,1DF,49DF) = 4.038, so the overall model is not statistically significant at the 5% level.
Conclusion:
Since b<1, AU Small Finance Bank LTD. shares are good for long term investment.
References:
https://www.facebook.com/matthewchris.baji/posts/716714069698176