Title: Relationship of Bank of Baroda with Nifty50.
Author: Bipin Yadav
Intro: Bank of Baroda is a PSU bank founded in the year 1908. It has a total of 8209 branches domestically in India. It is one of the profitable banks of the PSU and the second largest bank in terms of market cap. Bank of Baroda is also working in the green initiatives to follow the ESG norms. With its subsidiaries in India and overseas it has a wider consumer reach.
Objective: To calculate Beta and its significance.
Views and Reviews: During the year 2021-22, Bank of Baroda does not have adequate current assets to pay off liabilities, cash position was not good. It needed to work more on increasing deposits and cash position, reducing borrowings and NPA. However, it was working efficiently because its net profit ratio was increasing.
Data collection: Nifty and Bank of Baroda’s closing price was collected from NSE website. Weekly return of Nifty is termed as “X” and weekly return of Bank of Baroda is termed as “Y”. Besides that, a few other things written in this report are taken from other websites and its information is provided in references.
Data Analysis:
Equation: Y=0.1514+1.6195x
Interpretation:
The above equation shows the relation between Nifty50 and Bank of Baroda.
Return of Bank of Baroda is dependent variable and return of Nifty50 is independent variable.
Positive sign means if Nifty50 rises by 1 unit then share price of Bank of Baroda will also rise by 0.23 and vice-versa.
Number of observations are 49.
3.74 is the t-stat for Y, the p-value for which is 0.0004.
R square is 0.2301 which means 23% of variances in Bank of Baroda are explained by Nifty.
F is 14.046, p-value for this is 0.0004 which means model is statistically significant at 1% level.
Conclusion: Beta is 0.1514 which is less than 1, it means that Bank of Baroda is good for long term investment.
Reference:
https://www.nseindia.com/
https://www.forbesindia.com/article/explainers/public-sector-banks-in-india/89933/1
https://www.irjmets.com/uploadedfiles/paper//issue_4_april_2023/37523/final/fin_irjmets1683024790.pdf