Author -Rutuja Yadav
Batch -F3
Title: Relationship between Repco Home Finance Limited (RHFL) and NIFTY50
Introduction: – Repco Home Finance Ltd (RHFL) is a housing finance company headquartered in Chennai, Tamil Nadu. It was incorporated in the year 2000.RHFL is registered with National Housing Bank (NHB). As of March 2023, RHFL is operating through 159 branches. The mission of RHFL has been to translate the aspirations of people to own a house by covering the existing market and potential comprehensively through institutional credit support customised to suit individual needs in a transparent and ethical manner.
Objective: – Calculation of Beta and its significance
Views & Reviews about the company: –
- Repco Home Finance offers nine alternative home loan solutions to choose from, all of which are tailored to the needs of the prospective consumer without requiring them to sign up for a comprehensive package. Repco Home Finance offers nine alternative home loans solutions to choose from all of which are tailored to the needs of the prospective consumer without requiring them to sign up for a comprehensive package—Mandira Jain
- Repco Housing Finance is a household brand in South India having disbursed over Rs 2,000 crore in housing loans at the conclusion of the 2014-15 fiscal year. The company is profitable year after year. The whole customer centric package provided by Repco Home finance ltd is fascinating. Some of the features are one can apply for bank loan through online mode, which is convenient and quick. Repco’s 23 years of experience in this industry assures that it knows what it takes to put together a successful house loan, taking into account the customer’s specific demands and limits—Pallavi Kumari
Data Collection: – Data has been gathered from NSE website from 01.10.2022 to 30.09.2023, Friday closing prices have been found out,return value has been calculated based on Friday closing price .
Data Analysis: – The above equation shows the relationship between Equity and Nifty50
The regression equation is of the form of Y = b+ a*X
where:
- X represents Weekly returns of Nifty
- Y represents Weekly returns of Equity
- a represents slope or the coefficient of X
- b represents intercept
Equation of Linear regression is-
Weekly return of Equity (Y) = – 0. 2551 – 0.3338 *Weekly returns of Nifty50
Interpreting the coefficients:
- Number of Observation (N)= 50
- Slope (a) = -0.3338
- Intercept (b) = -0.2551
- t-stat= -0.6314
- The above equation shows the relation between Repco Home Finance Ltd and Nifty50
- Equity is the dependent variable and Nifty50 is the independent variable.
- The negative sign shows there is a negative relation between weekly return of Equity and weekly return of Nifty50.
- If the Nifty decreases by 1 unit, then Equity decreases by 0.33 units.
- Number of Observation (N) =50, R square =0.0093, which means 0.93% of change in Equity, which means 99.07% is the error due to variable, which are not included in the model.
- The P-value is 0.5305 and F is 0.4551 which means overall this model is statistically significant at 45% level.
Conclusion: – Beta is 0.3338
Since Beta is 0.3338 which is less than 1 it means Repco Home Finance Ltd is good to invest in for long term.
References: – 1) https://www.nseindia.com/reports-indices-historical-index-data