Topic : Relationship of Tata steels limited with nifty 50
Author: Trupti More
Introduction:
Tata Steel was established in India as Asia’s first integrated private steel company in 1907. With this, company developed India’s first industrial city at Jamshedpur. Today, this company is among the leading global steel companies. Annual crude steel capacity across Indian operations is nearly 20 MnTPA and registered a turnover of INR 91,037 crore in FY21. Company also set up their second greenfield steel plant of 3 MnTPA in the eastern state of Odisha in 2016; the expansion to 8 MnTPA in currently underway. It also Possess and operate captive mines that help us maintain cost- competitiveness and production efficiencies through an uninterrupted supply of raw material. This is how company ensure that we remain the lowest cost producer of steel in Asia.
Objective: To calculate Beta of tata steel limited and observe its significance
Views and reviews : Consistent with the vision and values of the founder Jamsetji Tata, Tata Steel strives to strengthen India’s industrial base through effective utilization of staff and materials. The means envisaged to achieve this are cutting edge technology and high productivity, consistent with modern management practices. Tata Steel recognizes that while honesty and integrity are essential ingredients of a strong and stable enterprise, profitability provides the main spark for economic activity. Overall, the Company seeks to scale the heights of excellence in all it does in an atmosphere free from fear, and thereby reaffirms its faith in democratic values.
We aspire to be the global steel industry benchmark for Value Creation and Corporate Citizenship.
Data collection :
The data 1/7/2023 to 30/6/2023 this period has been download from NSE site & weekly closing prices were found out. Then weekly return of Nifty & weekly return of tata steel limited company were calculated. Nifty returns were taken as X & tata steel returns were taken as Y was regressed on Y.
Data analysis: Y ̂= 0.0035 – 3.319x.
N = 50 . R 2 = 0.3783. F = 29.21
Interpretation : The above Equation shows the relationship between the Nifty 50 (X) with the tata steels (Y). The negative sign means the negative relation. It means that the nifty 50 stock rises then -tata steels- stock falls and vice versa. If nifty 50 rises by 1 unit tata steels fall by 3.31 units. N means there are 50 observation. T is -5.404, which is less than tabulated T (t..05,48 2.0106). T stat for b is statiscally not significant. R2 is 0.3783 which indicates that the 37.83% of Y is explained by X , balance 62.17% is error due to the variable which not in model. . F is 29.21 which is greater than the table value ( F.05, 1,48 4.0420). So, overall the model is not statistically significant @5% level of significance.
Conclusion
The beta value being less than 1 indicates that –Tata steels limited shares are well-suited for long-term investment.