Title : Relationship between Nifty and RBL Bank Limited.
Author : Riya Dsilva
Introduction: RBL Bank, formerly known as Ratnakar Bank, is an Indian private sector bank headquartered in Mumbai and founded in 1943. It offers services across six verticals: corporate and institutional banking, commercial banking, branch and business banking, retail assets, development banking and financial inclusion, treasury and financial market operations. The Bank has raised Rs. 8,600 crore of equity capital and Rs. 1500 crore of Basel III-compliant Tier II debt from 2010 to date. It currently services over 14.31 million customers through a network of 528 branches.
Objective: To calculate beta and its significance.
Views & Reviews: 1) R Subramaniakumar CEO RBL Bank : Bank is growing in 2 niche areas- credit card and microfinance. RBL bank is the 6th largest credit card issuers in the country and bank will continue to maintain leadership position in that by expecting a growth of 17% in future. Banks growth in advances for FY 26 will not be less than 20%. Growth in wholesale banking will be flattish. SME banking will grow between 15-17%.
2) Ravi Pichan CIO RBL Bank : Bank has made a lot of investments in digital infrastructure & platforms over the past several years. RBL Bank is a believer that UPI is going to scale massively, and bank has lot of capabilities to be a part of this revolution.
Data Collection: The data for the period of 1year (from 01-11-2022 to 31-10-2023) has been downloaded from the NSE site. Friday closing price has been calculated. Weekly returns of Nifty is “x” and of Equity is “y” and it has been calculated.
Data Analysis : The following equation RBL=-0.931+ 0.696(Nifty 50) shows the relationship between Nifty 50 and RBL Bank.
RBL Bank is dependent variable & Nifty 50 is an independent variable. The co-efficient of Nifty 50 is 0.15. The positive sign means if Nifty rises by 1 unit, the equity rises by 15%. t- stat for b(coefficient of Nifty) is 1.07 and the “p” value is 0.28. No.of observations is 50.
Conclusions: Here, as the beta is less than 1 i.e. 0.696, so it is better for long term investment.