Title: Relationship of Reliance Limited with Nifty50.
Author: Riya Chaudhary
Introduction: Reliance Industries Limited (RIL) is a multinational conglomerate company headquartered in Mumbai, India. It is the largest public company in India by market capitalization and revenue, and the 100th largest company worldwide. It is also India’s largest private taxpayer and largest exporter, accounting for 7% of India’s total merchandise exports.RIL’s businesses include energy, petrochemicals, natural gas, retail, telecommunications, mass media, and textiles. The company has a strong presence in all its operating segments and is a leader in many of them.
Objectives: To calculate beta and find its significance.
Views & Reviews: RIL’s performance under Mukesh Ambani’s leadership has been a mixed bag. While the company has undoubtedly contributed to India’s economic growth and technological advancements, its practices in areas like market dominance, labor rights, and environmental impact raise valid concerns.
Data collection:
Data is downloaded from https://www.nseindia.com/reports-indices-historical-index-data https://www.nseindia.com/get-quotes/equity?symbol=RELIANCE for the period 1-10-2022 to 30-09-2023
Data analysis:
Regression Equation: Return of Reliance = 13427.53 + 0.243183 Nifty
( 0.507051) t Stat
N = 49, R2 =0.00544, P Value =0.61449, F = 0.257101
Interpretation: In the above equation shows the relationship between Nifty 50 and Reliance share. Return of Reliance is dependent variable and Return of Nifty 50 is independent variable. Negative sign means if Nifty 50 price rises, Reliance share price falls. If Nifty 50 price rises 1 unit, Reliance share price will fall by 0.243183 unit & vice versa. No of observation are 49. Figure which is written in bracket 0.507051 is t test for b. The P value for which is 0.61449 which means Nifty 50 is statistically insignificant at 5% level. R square is 0.00544 which means 5.44% of variances in Reliance share price are explained by Nifty 50 in other words 94.56% is error means 94.56% is due to the variables which are no in the model. F is 0.257101. Overall model is statistically insignificant at 5% level.
Conclusion: Beta is 0.243183 is less than 1 it means Reliance is good for long term investment.
References:
https://www.nseindia.com/reports-indices-historical-index-data
https://www.nseindia.com/get-quotes/equity?symbol=RELIANCE