Title: Relationship of Safari Industries (India) Limited with Nifty and to calculate Beta.
Author: Sanobar Jatu
Introduction:
Safari Industries (India) Limited is a prominent luggage and travel solutions company based in India. Established in 1974, Safari has become a trusted name known for its diverse range of products, including suitcases, backpacks, and travel accessories. The company emphasizes innovation and quality, consistently adapting to evolving consumer needs in the travel and lifestyle space. With a commitment to durability and style, Safari Industries has carved a niche for itself in the Indian market. Over the years, Safari has embraced innovation, introducing features like lightweight materials, anti-theft technology, and smart compartments in its products. The brand’s emphasis on research and development has allowed to stay ahead in an ever-changing market.
Objective: To calculate Beta and to see its significance
Literature Review:
- Investcorp sells 1.89% stake in Safari Industries [Stock in news]:
Investcorp sells 1.89% stake in safari industries [stock in news]. (2023, Feb 16). Mumbai: Mid-market private equity fund Investcorp sold a 1.89% stake in luggage maker Safari Industries on Tuesday for Rs 83.7 crore, exchange deals data showed. Investcorp Private Equity Fund II, a buyout fund managed by IDFC Alternatives PE and Bahrain-based Investcorp Strategic Capital Group, sold 450,000 Safari Industries’ shares on BSE at Rs 1,861.44 apiece. HDFC Mutual Fund bought a major chunk of the shares. Names of other buyers were not publicly available. This is the second tranche and follows a partial exit in September 2022. Back then, it sold 500,000 shares which fetched Rs 76.5 crore. In all, the consumer focussed fund has fetched Rs 160 crore by selling nearly three-fourths of its investment. It stands to make three times returns. After Tuesday’s share sale, it will hold about 300,000 shares worth Rs 56 crore at current rates. Shares of Safari Industries closed at Rs 1,875 on Tuesday, down 6.57% from the last close. The stock has risen three times since Investcorp’s investment – Rs 75 crore via preferential route – in February 2021. – Our Bureau.
- Investcorp makes final exit from Safari Industries [Durables]:
Investcorp makes final exit from safari industries [durables]. (2023, Oct 06). Global investment manager, Investcorp sold its stake in luggage maker Safari Industries, the company announced on Wednesday. It realised a total return of Rs 285 crore at 3.8X Multiple on Invested Capital (MOIC) from Safari Industries, the Bahrain-based company said in a statement. “The Internal Rate of Return (IRR) on the complete deal stood at 102 per cent,” it added. It made partial exits in the company in three tranches, the third and final one on Wednesday. In February 2023, it sold a 1.89% stake in luggage maker Safari Industries for Rs 83.7 crore marking the second tranche post which it held about 300,000 shares. This February sale was following a partial exit in September 2022 when it sold 500,000 shares which fetched the consumer focussed fund a sum of Rs 76.5 crore. In February 2021, Investcorp had invested Rs 75 crore in Safari Industries. “Collaborating with Sudhir Jatia’s (MD &CEO of Safari Industries) visionary leadership and dedicated team has been a rewarding journey, and this partnership is a testament to Investcorp’s commitment to investing in companies with strong growth potential,” said Gaurav Sharma, Head of Private Equity India at Investcorp. Shares of Safari Industries closed at Rs 3,760.25 on Wednesday up 0.68 per cent from the last close. Investcorp, In September 2022, exited ASG Eye Hospital. It sold its shareholding as part of a growth capital funding round of Rs 15 billion, it said. The investment management firm boasts to have investments in mid-market companies across consumption-linked sectors and in the real estate business. Over the last four years, Investcorp’s investments include V-Ensure, NDR Warehousing, Intergrow Brands, Bewakoof.com, Freshtohome, Zolo, InCred, and Safari Industries among others.
Data Collection:
The data for Nifty and Equity for Safari Industries (India) Limited has been downloaded from Nse.com and finance.yahoo.com for the period 1st Nov 2022 to 31st Oct 2023. The data was manipulated for closing price of nifty and equity. The weekly returns of nifty and equity were found.
Data Analysis:
Safari Industries (India) ltd=2.1168=0.1209 nifty
N=48
Rsquare=0.013
F= 0.6206
The above equation shows the relationship of Safari Industries (India) Limited with nifty. If Nifty rises by 1 unit, Safari Industries (India) Ltd. will rise by 0.1209 unit.
t-stat for b= 0.7878 and the p value= 0.434 which is more than 0.05, so b=0, meaning Nifty does not impact Safari Industries (India) Ltd. shares.
Rsquare= 0.01, meaning 1% Safari Industries (India) Ltd. shares is explained by Nifty, meaning 99% depends on other things like fundamentals.
F= 0.62 and p value is more than 0.05, so the model is not statistically significant at 5% level.
Conclusion:
As Beta(0.1209) is less than 1, so good for long term investment.
References:
Investcorp sells 1.89% stake in safari industries [stock in news]. (2023, Feb 16). The Economic Times Retrieved from https://www.proquest.com/newspapers/investcorp-sells-1-89-stake-safari-industries/docview/2776714053/se-2
Investcorp makes final exit from safari industries [durables]. (2023, Oct 06). The Economic Times Retrieved from https://www.proquest.com/newspapers/investcorp-makes-final-exit-safari-industries/docview/2873012366/se-2
Buy safari industries (india), target price rs 2476: Prabhudas lilladher [ViewsRecommendations]. (2023, Feb 10). The Economic Times Retrieved from https://www.proquest.com/newspapers/buy-safari-industries-india-target-price-rs-2476/docview/2774607407/se-2