Title: Relationship of PARADEEP PHOSPHATES LIMITED with Nifty50.
Author: Piyush Sahu
Introduction : Pradeep Phosphates Limited (PPL) is one of India’s leading private sector players in phosphatic fertilizers. PPL currently has a total capacity of 3 million MT, of which 2.60 million MT is Phosphates and the balance 0.40 million MT is Urea. PPL can produce a wide mix of phosphatic fertilizers, across six fungible production trains, ranging from DAP, N-10, N-12, N-14, N-19, N-20, N28 and others. The company is also a major supplier of various industrial products like Gypsum, Azymite, HFSA (Hydrofluorosilicic Acid), Sulphuric Acid, and Ammonia. The shares of this company are currently listed and traded on NIFTY, Bombay Stock Exchange (BSE), and NSE (New York Stock Exchange).
PPL was incorporated in 1981 as a joint venture between the Government of India (GoI) and the Republic of Nauru (RN) to set up a phosphatic fertilizers manufacturing unit at Paradeep, Odisha. Later in 1993, with the divestment of RN’s stake, PPL became a public sector enterprise (PSU). Subsequently, in 2002, GoI decided to divest close to 80% of its stake in favour of Zuari Maroc Phosphates Pvt. Ltd. (ZMPPL), a joint venture between Zuari Agro Chemicals Limited (ZACL) and the OCP Group S.A. While ZACL is a pre-eminent fertilizer player in India; the OCP Group, based in Morocco, is one of the world’s largest phosphatic companies, controlling over 70% of the world’s known phosphate reserves, with a revenue of over USD 10 billion in FY 22.
In May 2022, PPL successfully completed its INR 1500 crore initial public offering (IPO), during which GoI divested its entire remaining 19.55% stake. The company also used part of the proceeds to complete the acquisition of the 1.2 million MT fertilizer plant in Goa in June 2022. Post IPO, ZMPPL holds 56.10% in PPL
Objectives: To calculate beta and find its significance.
Views & Reviews: Paradeep Phosphates Ltd (PPL) is a leading fertilizer company with an annual turnover close to Rs. 5,000 crores. PPL is part of Adventz Group of Companies led by the group Chairman Mr. Saroj Kumar Poddar. Paradeep Phosphates Limited (PPL) is a subsidiary of Zuari Maroc Phosphates Private Limited (ZMPPL), a joint venture between the Adventz group company, Zuari Agro Chemicals Limited, and Maroc Phosphore S.A., a wholly owned subsidiary of OCP, Morocco (Office Cherifien des Phosphates). The Government of India holds 19.55% of shares while 80.45 % shares are held by Zuari Maroc Phosphates Pvt Ltd.The Plant with an installed annual capacity of 12, 00, 000 metric tonnes of DAP and other phosphatic fertilizers was commissioned in 1986 along with off-site facilities with a 3.4 km closed conveyor from port to plant site as well as a railway siding, raw material storage yards and a 3.1 km long pipe rack.
Paradeep Phosphates Ltd Reviews for Investors:
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Zuari Maroc Phosphates Private Limited |
Promoter |
56.08 |
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Sbi Multicap Fund |
Public |
6.96 |
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Life Insurance Corporation Of India |
Public |
4.28 |
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Nippon Life India Trustee Ltd-A/C Nippon India Small Cap Fund |
Public |
3.60 |
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Dsp Small Cap Fund |
Public |
2.91 |
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Mirae Asset Flexi Cap Fund |
Public |
2.75 |
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Goldman Sachs Funds – Goldman Sachs India Equity Portfolio |
Public |
1.91 |
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Hdfc Large And Mid Cap Fund |
Public |
1.47 |
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Tata Mutual Fund- Tata Equity P/E Fund |
Public |
1.13 |
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Data Analysis:
Equation: Y= 0.0993229+0.27804X
Interpretation:
The above equation shows the relation between Nifty50 and Paradeep Phosphates Ltd
Return of Paradeep Phosphates Ltd is dependent variable and return of Nifty50 is independent variable.
Positive sign means if Nifty50 rises by 1 unit then share price of Paradeep Phosphates Ltd will also rise by 0.007812 and vice-versa.
Number of observations are 49.
0.60832789 is the t-stat for Y, the p-value for which is 0.545898809.
R square is 0. 0.0078121 which means 0.78% of variances in are explained by Nifty.
F is 0.370062827, p-value for this is 0.545898809 which means model is statistically significant at 1% level.
Conclusion: Beta is 0.0993229 which is less than 1, it means : Paradeep Phosphates Ltd that Limited is good for long term investment.
References: