Title: Relationship between Nifty and Adani Greens
Author: Anusha Jeevan Saliyan
Introduction
Adani Green Energy Limited (AGEL) is one of the largest renewable companies in India, with a current project portfolio of 20,434 MW. AGEL is part of the Adani Group’s promise to provide a better, cleaner and greener future for India. Driven by the Group’s philosophy of ‘Growth with Goodness’, the Company develops, builds, owns, operates and maintains utility-scale grid-connected solar and wind farm projects. The electricity generated is supplied to central and state government entities and government-backed corporations.
Objective– To calculate Beta and its significance.
Views & Review– Amit Singh, the CEO of AGEL, shared the company’s aim to deliver over 45 GW of renewable energy. This would be a five-fold increase from its current operating portfolio and better align with India’s target of achieving 500 GW non-fossil fuel capacity by 2030.
He said, “Adani Green is committed to not only enabling India’s decarbonization goals but also contributing towards the Atmanirbhar Bharat vision. We are glad to conclude the largest green PPA and enable a sustainable energy landscape. This reaffirms our resolve to provide affordable and accessible clean energy.” Gautam Adani also plan to inject $1 billion equity into the firm. This would allow the company to raise debt without harming its credit metrics.
Data Collection– The data is downloaded from the website nseindia.com. The data was extracted for the period 1-10-2022 to 30-09-2023, and the entire data except the data and closing price for the end of the week were excluded. The returns were calculated with the previous week’s return as the base.
Weekly returns of Nifty= x
Weekly returns of Adani Green =y
Linear regression was carried out.
Data Analysis–
The regression equation is: Adani Green LTD = (0.747401+ 1286.754)Nifty
The above equation shows the relationship between Adani Green Ltd and Nifty Index. Equity is the dependent variable and Nifty is the independent variable. The correlation is 0.989524596. The positive sign indicates that, if Nifty rises Equity also rises, and vice versa. If Nifty rises one unit and the p-value is 0.989525. Number of observations are 50.
The R square is 3.706
Conclusions:
Beta is 0.747
Since Beta is 0.747 which is less than 1, it is advisable to invest for a long time as it is less volatile.
Reference :
https://www.nseindia.com/reports-indices-historical-index-data