Title- Comparison of Apollo Tyres with Nifty
Author- Aakash Suhas Yeole
Batch- F3
Roll No- 21230023119
Introduction
Apollo Tyres Limited is an Indian multinational tyre manufacturing company headquartered in Gurgaon, Haryana. It was incorporated in 1972, and its first plant was commissioned in Perambra in Chalakudy, Kerala. The company now has five manufacturing units in India, one in the Netherlands] and one in Hungary. It has a network of nearly 5,000 dealerships in India, of which over 2,500 are exclusive outlets.
The company generates 69% of its revenues from India, 26% from Europe and 5% from other countries.
Apollo announced its entry into the two-wheeler tyre segment with contract manufacturing in March 2016.
History
Apollo Tyres Ltd. was incorporated on 28 September 1972 in India as a Public Limited Company and obtained certificate of Commencement of Business on 24 October 1972. The company was promoted by Bharat Steel Tubes, Ltd., Raunaq International Pvt. Ltd., Raunaq & Co. Pvt. Ltd., Raunaq Singh, Mathew T. Marattukalam and Jacob Thomas. In 1975, the company made its Initial public offer of equity shares and its first manufacturing facility was commissioned in Perambra Plant, Thrissur, Kerala, India in 1977, followed by its 2nd plant at Limda, Gujarat, India in 1991. The company acquired Premier Tyres Limited- PTL in 1995, which became its 3rd plant at Kochi, Kerala, India. In 2008, it started a new plant at Chennai, Tamil Nadu, India. A year later in 2009, the company acquired the Netherlands-based tyre maker Vredestein Banden B.V. (VBBV) for an undisclosed sum.
The company focused on the production of truck tyres in India and introduced its first truck tyre, Rajdhani in India. The company expanded its operation across India and in 1996, it expanded operations outside India by acquiring Dunlop‘s Africa operations. In 2013, it disposed of the Dunlop brand in Africa along with most of the South African operation in a sale to Sumitomo Rubber Industries of Japan. The very same year, it started its Global R&D Centre, Europe in Enschede, the Netherlands.
In 2015, Apollo Tyres bought Germany’s Reifencom tyre distributor for €45.6 million. It shifted its corporate office for Europe region to Amsterdam from Enschede, the Netherlands and opened a Global R&D Centre, Asia in Chennai, India a few months later.
In 2016, the company signed an MoU with the Government of Andhra Pradesh to set up a new factory in the state. On 9 January 2018, the Chief Minister of Andhra Pradesh, N Chandrababu Naidu laid the foundation stone for Apollo Tyres’ ₹1,800-crore tyre factory in Andhra Pradesh. The plant will come up over a 200-acre site in Chinnapanduru village near Sri City in Tirupati district and produce passenger car radial (PCR) tyres with an initial capacity of 55 lakh (5.5 million) tyres per year and also truck bus radial (TBR) tyres and will serve both domestic and export markets.
Data collection:
Data is carried from NSE India site.
Friday closing price of NIFTY50 are followed.
The weekly return of Apollo Tyres are followed
The weekly closing returns of Nifty50 are considered X variable, and the weekly closing returns of Apollo Tyres are considered Y variable.
Data collection is done from 1st October 2022 to 30th September 2023.
Data Analysis:
The Regression equation Y=0.40723 + 1.05163 (X) Nifty50
The above equation shows the relationship between APOLLO TYRES weekly closing return and Nifty50 weekly closing return.
R-Square = 0.18%
There will be a 0.18% change in APOLLO TYRES due to Nifty50.
Beta= 1.05
P-Value= 0.0024
F= 10.30
T-Stat= 3.21.
Nifty rises by one rupee then Equity will rise by 1 rupee & 05 paise. t-stat for b (co-efficient of Nifty) is 3.21 and the p-value is 0.00, meaning Nifty is statistically significant for Equity at a 17.97% level. Number of observations are 49. R squared is 0.1797, which means 17% of the change in Equity is explained by Nifty, which means 83% is the error due to variables, which are not included in the model. F is and the p-value is 0.024, which means the overall model is statistically significant at a 0.24% level.
Conclusion:
Beta is 1.05
So Beta is 1.05 which s greater than 1, it is advisable to invest in short term.
Reference:
https://www.nseindia.com/reports-indices-historical-index-data
https://www.nseindia.com/get-quotes/equity?symbol=APOLLOTYRE
https://en.wikipedia.org/wiki/Apollo_Tyres