1. Author – Baby Kumari
2. Introduction – Bajaj Finance Limited (BFL) is an Indian non-banking financial company headquartered in Pune. It is one of the leading non-banking financial companies (NBFCs) of India with a customer base of 73 million and holds assets under management worth ₹270,050 crore (US$34 billion).
As per the 2023 list of NBFCs issued by the Reserve Bank of India, Bajaj Finance Limited holds the second position in the upper layer based on scale-based regulation guidelines.
3. Objective – To find out Beta and its Significance.
4. Views and Reviews –
Bajaj Finance is firing on all cylinders! Their recent performance has been nothing short of stellar, and I’m not just saying that as a friendly competitor.”- CEO of a reputed competitor Company.
“Overall, I believe Bajaj Finance is a well-managed company with a clear vision for the future. They’re poised for continued success, and I wouldn’t bet against them. Keep an eye on them – they’re definitely a force to be reckoned with!”-CFO of a competitor Company.
5. Data Collection –
The data for the analysis was collected from the historical data of the Nifty 50 Index and Bajaj Finance Limited from www.nsendia.com and further the data was classified into the date from 01/10/22 to 30/9/23, the weekly closing balance was then considered ,then the returns were calculated of both the Nifty 50 index (X: Independent Variable) and Bajaj Finance Limited (Y: Dependent Variable) in the table form on excel and then lastly considering the returns of both we found the regression.
Few other details taken into consideration while collecting data were:
1. After the collection of the entire data of the given time period, only the data of Fridays were taken by shorting the whole data.
2. According to the closing data of Nifty 50 of the time
period, return values are collected using the formula as
given below:
Weekly Returns = Closing price of end of the week – Closing price of beginning of the week/Closing price beginning of the week*100
6. Data Analysis – Regression equation y on x (y = a+bx).
The regression equation is y = 4909.347+0.093529x
Interpretation:
The regression equation Y= 4909.347+0.093529x represents a relationship between two variables, where Y is the dependent variable and x is the independent variable.
The intercept of 4909.347 suggests that when the independent variable (x) is equal to zero, the predicted value of the dependent variable (Y) is approximately 4909.347. However, in some contexts, it’s essential to consider whether a value of zero for the independent variable is meaningful and within the observed range of the data.
The slope of 0.093529 implies that for every one-unit increase in the independent variable (x), the predicted value of the dependent variable (Y) is expected to increase by approximately 0.093529 units. This suggests a positive linear relationship between the variables.
Number of observations are 49.
0.920746 is the t-stat for Y, the p-value for which is 0.361884878.
R square is 0.017718149 which means 1% of variances in Bajaj Finance Limited are explained by Nifty.
7. Conclusion – Here the beta is 0.093529 which is less than 1, which means Bajaj Finance Limited is good for long term investment.
8. References– Source of data is collected from https://www.nseindia.com