TITLE: Relationship between Nifty50 & VIP Industries ltd.
AUTHOR: Vishaka Iyer
INTRODUCTION: VIP Industries is India’s largest luggage manufacturing company which manufactures luggage and travel accessories. It is based in Mumbai, Maharashtra, India and is the world’s second-largest and Asia’s largest luggage maker.The company has more than 8,000 retail outlets across India and a network of retailers in 50 countries. It acquired United Kingdom-based luggage brand Carlton in 2004. The history of the company goes back to the year 1970. Since then, the company has recorded a sale of around 10 crore (100 million) pieces of luggage worldwide.Formerly, the company was known by the name Aristo Plast VIP Industries and it was incorporated in 1968.The company consisted of two wholly owned subsidiary companies, namely Blow Plast Retail Limited V.I.P. Industries Bangladesh Private Limited V.I.P. Industries BD Manufacturing Private Limited and V.I.P. Luggage BD Private Limited. As of 31 March 2019 the company has one Indian and four overseas wholly owned subsidiaries.
OBJECTIVE: Calculate Beta of VIP Industries & it’s significance.
LITERATURE REVIEW:
Xin & Ma(2024):A metropolitan area is a new form of urban development under the agglomeration effect and scale economy. The renewal and upgrading of urban spatial structures have brought new pressure to urban commuting. Under the new form of the metropolitan area, the process of regional integration has accelerated, and long-distance extreme commuting has increased. The construction of a transportation mode selection model with the value of commuting travel time as the core variable can help commuters to choose a reasonable transportation mode and provide a basis for the government and relevant departments to formulate traffic management plans and implement traffic congestion mitigation policies
Gupta, A et al( 2023): Protected areas (PAs) can help address biodiversity loss by promoting conservation while fostering economic development through sustainable tourism. Nature-based tourism can generate economic benefits for communities in and around PAs; however, its impacts do not lend themselves to conventional impact evaluation toolsSimulations suggest that nature-based tourism creates significant economic benefits for communities around PAs, including the poorest households, and many of these benefits are indirect, via income and production spillovers.
DATA COLLECTION:
The data for Nifty 50 and VIP Industries has been downloaded from the NSE website for the period of 01 February 2023 to 31 January 2024. The data has been manipulated to obtain the Friday closing prices of Nifty 50 and VIP industries. The weekly returns of the NSE index Nifty 50 are represented by X, while the returns of equity for VIP industries Ltd are represented by Y. Wherein Y (Equity of VIP Industries Ltd) is Regressed on X (Nifty 50), and the relationship between the two has been plotted.
DATA ANALYSIS:
The equation for the data is-
Y= 0.4423739298+ 0.1231539333X
N= 48
R Square= 0.002602460698
t Stat= 0.3464470434
F= 0.1200255539
INTERPRETATION:
The above equation shows the relationship between Nifty 50 (X) and VIP industries (Y)
The positive sign in the equation means that there is a direct relationship between Nifty 50 and VIP industries Ltd i.e., if Nifty 50 rises by 1 unit, VIP Industries Ltd will also rise by 0.12.
Number of observations are 48.
R^2 0.00260, which means 26% of returns of VIP industries Ltd is explained by Nifty 50. Therefore, 74% is error due to other variables which are not taken in the model.
F= 0.1200255539 , which is less than table F, which means overall the model is not statistically significant at 5% level.
CONCLUSION:
As beta =0.1231539333, is less than 1, therefore we should not invest for long term
REFERENCES:
Xin, D., & Ma, T. (2024). Commuter travel behavior modeling in metropolitan areas based on cumulative prospect theory: A case study of Xi’an, china. Complexity, 2024
Gupta, A., Zhu, H., Bhammar, H., Earley, E., Filipski, M., Narain, U., Taylor, J. E. (2023). Economic impact of nature-based tourism. PLoS One, 18(4)