Author- PULLAGURA SAI GOKKULL (21230023260) (OPS)
Introduction –
Steel Authority of India Limited, a steel-making company, manufactures and sells iron & steel products in India and internationally. It offers a range of railway products, which include rail, high YS/UTS rail, corrosion resistant micro alloyed rail, vanadium alloyed rail, end forged thick web asymmetric rail, high conductivity rail, crane rails, and crossing sleeper bars. The company also provides pig iron and pipes; semis; structural and TMT bars; galvanized products; wire rods, plate mill plates, and wheels and axles; hot rolled and cold rolled products; and stainless and electrical steel products. Steel Authority of India Limited was founded in 1954 and is based in New Delhi, India. The Government of India owns about 65% of SAIL’s equity and retains voting control of the Company. However, SAIL, by virtue of its ‘Maharatna’ status, enjoys significant operational and financial autonomy.
Objective –
To calculate the beta of SAIL Ltd and its significance.
Views & Reviews-
- AMARENDU PRAKASH (CHAIRMAN OF SAIL LTD.)
The Steel Authority of India (SAIL) is gearing up to commence trial production of head hardened (HH) rails, crucial for metro rail and freight corridor projects, by the end of the month, according to Chairman Amarendu Prakash. Originally slated for August, the trials were postponed due to heightened demand for normal rails like 880 grade from the Indian Railways. SAIL, equipped with the necessary technology, has established facilities for HH rail production at its Bhilai Steel Plant (BSP) in Chhattisgarh, where cold trials have already been completed.
Once operational, SAIL will become the second player in India to produce HH rails, with Jindal Steel and Power (JSPL) already manufacturing them in Raigarh, Chhattisgarh. SAIL also supplies forged wheels to the Railways from its Durgapur Steel Plant (DSP) in West Bengal.
In terms of coking coal sourcing, SAIL obtains supplies from various countries, including Australia, the United States, Russia, and Indonesia, as well as through a joint venture in Mozambique. Plans are underway to double the production capacity of the Mozambique-based International Coal Ventures Pvt. Ltd. (ICVL) from 2 MTPA to 4 MTPA, aiming to enhance coking coal supplies.
However, escalating coking coal prices pose challenges, directly impacting input costs and profit margins. Prices surged from $230 per tonne in June-July 2023 to $341 per tonne CFR (cost and freight) India by September end. Additionally, the European Union’s proposed carbon border adjustment tax (CBAM) could further strain Indian exporters by increasing the cost of supplies to Europe.
SAIL, India’s largest steel-making company with an annual capacity exceeding 21 MTPA, operates under the Ministry of Steel, Government of India.
Data Collection –
The data is downloaded from the 1st of February 2023 to the 31st of January 2024 for Nifty 50 and SAIL LTD.
Nifty 50 is the independent variable
SAIL LTD is the dependent variable
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ANOVA TABLE –
Data Analysis –
The equation for the data is –
X- Nifty 50; Y- SAIL LTD.
Y=0.0632+1.4951X
N= 48, R Square= 0.256806038, F value= 15.89501305
The above equation shows the relationship between Nifty 50 return and SAIL LTD. stock return. Where Nifty 50 is the independent variable and SAIL LTD`s capital’s is the dependent variable. The positive sign in the equation shows that there is a direct relationship. If the return of Nifty 50 increases then the return of SAIL LTD`s capital will also increase and vice versa.
The number of observations is 48.
R-square is 0.256806038 which means 25.6% of SAIL LTD`s capital is explained by nifty 50 is 74.4% are errors that are not in the model.
Figures and brackets are the T stats is R-square. The P-value of this is 0.000237447, it is less than 0.5 which means nifty 50 is statistically significant at the 5 % level.
F is 15.89501305 and the P-value is 0.000237447 which is also less than 0.5 which means the overall model is statistically significant.
Conclusion –
The beta is more than 1 for the given model which means that we should invest for the short-term period.
Reference
- https://finance.yahoo.com/quote/AHLEAST.NS/history/
- https://www.asianhotelsnorth.com/board_of_directors.html
3. https://finance.yahoo.com/quote/%5ENSEI/history/