Title= Relationship Between Nifty50 and ACC limited.
Author = Aishwarya Deokar
Introduction =
ACC Limited is one of the leading cement companies in India, with a rich history spanning over eight decades. Established in 1936, ACC has been a pioneer in the cement industry, known for its commitment to quality, innovation, and sustainability. The company is part of the global conglomerate LafargeHolcim, ensuring access to world-class technology and expertise. ACC operates through a widespread network of cement plants, ready-mix concrete units, and sales offices, serving customers across India and beyond. With a focus on environmental stewardship and community development, ACC continues to be a trusted name in the construction materials sector.
Objective=
To Calculate Beta ACC limited and it’s significance.
Literature Review=
1)Mahmoodur, R. K. (2023, Jan 03) stated that ACC Limited, part of the Adani Group, has launched ACC ECOMaxX, a range of green concrete solutions designed to meet sustainable construction needs. Developed with unique green ready-mix technology, these products offer 30-100% lower embodied carbon content compared to standard concrete, reducing CO2 emissions significantly. With options ranging from lower to complete carbon neutrality, ACC ECOMaxX caters to various environmental preferences.
2) Agarwal, N. (2023, May 24) emphasizes that Adani Ports stock rallied 8% following a Supreme Court-appointed committee’s report clearing it of price manipulation allegations. Analysts maintain a bullish outlook, with a consensus buy rating and a target price of Rs 834.2. Other Adani Group stocks also surged, with Adani Enterprises leading the pack. Despite concerns raised by the Hindenburg report, investor confidence has grown, reflecting the conglomerate’s efforts to address issues and win back trust. However, Sebi’s investigation found suspicious trading activity in Adani stocks involving various entities.
Data Collection=
The data for Nifty 50 and ACC Ltd 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 ACC Ltd. The weekly returns of the NSE index Nifty 50 are represented by X, while the returns of equity for ACC Ltd are represented by Y. Wherein Y (Equity of ACC Ltd) is Regressed on X (Nifty 50), and the relationship between the two has been plotted.
Data Analysis=
Y was regressed on X
The equation for the data as ,
Y = -0.693624406+0.983352861X + e
N= 48
R square= 0.921
t- stat= 23.46
F= 5.507901
Interpretation –
1)The above equation shows the relationship between Nifty 50 (X) and ACC Ltd (Y).
2) The positive sign in the equation means that there is a direct relationship between Nifty 50 and ACC Ltd i.e., if Nifty 50 rises by 1 unit, ACC Ltd will also rise by 0.9833
3)Number of observations are 48.
4)R^2 is 0.921, which means 92.1% of returns of ACC Ltd is explained by Nifty 50. Therefore, 7.9% is error due to other variables which are not taken in the model.
5) 5.507901, which is less than table F, which means overall the model is not statistically significant at 5% level.
Conclusion=
As beta = 0.9833 is less than 1 therefore we should invest for long term.
Reference=
1)Agarwal, N. (2023, May 24). Hindenburg shadow gone! adani ports shares erase all losses led by short-sellers [stock in news]. The Economic Times Retrieved from https://www.proquest.com/newspapers/hindenburg-shadow-gone-adani-ports-shares-erase/docview/2817793032/se-2
2) Mahmoodur, R. K. (2023, Jan 03). ACC limited introduces ACC ECOMaxX range of green concrete solutions: New building materials & construction world. Nbm & Cw, Retrieved from https://www.proquest.com/magazines/acc-limited-introduces-ecomaxx-range-green/docview/2760701158/se-2