Relationship between NIFTY50 and SBI Cards and Payment services limited
Author – Shreya Phuke
Introduction – SBI Card was launched in 1998 by the State Bank of India and GE Capital. Incorporated as SBI Cards and Payment Services Private Limited (SBICPSL), SBI Card is headquartered in Gurgaon, Haryana. In December 2017, State Bank of India and The Carlyle Group acquired GE Capital`s stake in SBI Card.The company changed its legal name to SBI Cards and Payments Services Limited in August 2019. In March 2020, SBI Card became the first pure play credit card company to list on the stock exchanges in India. The aim of SBI Card is to offer Indian consumers access to a wide range of world-class, value-added payment products and services. Our endeavor is to siomplify the lives of our customers, employees and other important stakeholders. Today, with over 18 million credit cards¹ in force, we are the second largest credit card issuer in the country.
Objective – To calculate Beta and its significance
Literature review –
Literature Review 1:
This paper conducts a strategic analysis of SBI Cards and Payments Services Limited, focusing on its business model, competitive positioning, and growth prospects in the Indian financial services industry. Drawing on academic research, industry reports, and financial data, the study examines factors contributing to SBI Cards’ market leadership, including its strong distribution network, innovative product offerings, and strategic partnerships. The analysis also evaluates challenges faced by the company, such as regulatory changes, technological disruptions, and evolving consumer preferences. Through a comprehensive review of literature, this paper provides insights into SBI Cards’ strategies for sustainable growth and competitive advantage in the dynamic payments landscape.
Literature Review 2:
This literature review explores consumer perception and adoption of SBI credit cards in the Indian market. Drawing on empirical studies, surveys, and industry reports, the review examines factors influencing consumers’ decisions to choose SBI credit cards, including brand reputation, rewards programs, fees, and customer service. The analysis highlights the importance of trust and reliability in shaping consumer attitudes towards credit cards, as well as the role of marketing communication and word-of-mouth recommendations in driving adoption. Additionally, the review discusses challenges faced by SBI Cards in addressing consumer concerns related to security, privacy, and transparency. By synthesizing existing research, this paper offers insights into strategies for enhancing consumer engagement and loyalty in the competitive credit card market.
Data Collection – Historical data has been downloaded for both Nifty and SBI cards and payments for the period between 01/02/2023 to 31/01/2024 from www. nseindia.com and data has been manipulated to get only Friday closing Prices.
Data Analysis – The Standard Equation is : Y = a + b x X
Where X = Nifty Returns and
Y = SBI Cards and payments
Y was Regress on X
Therefore the Equation becomes,
Y = (0.0238) + (-0.0765) x X
Equity = (0.0238) + (-0.0765) x X
N = 99
R square = 0.008532
F = 0.83477
The above Equation shows the relationship between NIFTY50 and SBI cards and payments. NIFTY50 is independent variable and SBI Cards and payments is dependent variable.
The negative sign in the Equation means that there is an inverse relationship between NIFTY50 and Equity of SBI Cards and payments. i.e. if the return of NIFTY50 increases then the return of SBI Cards and payments will decrease and vice versa.
The number of Observation is 99.
R-square = 0.008532 which means 0.8% of SBI Cards and payment is explained by NIFTY50.
99.20% are errors which are not in the model.
Figures and Brackets are the t-stat is R-square. The t-stat value of this is 0.91365
F = 0.83477 which means the overall model is statistically significant at 5% level.
Conclusion – Beta β = 0.0765 which is less than 1 which means we can invest for long time.
Reference:
1)Kumar, A., & Singh, R. (2021). Strategic Analysis of SBI Cards and Payments Services Limited: A Review. International Journal of Finance and Banking Studies, 8(3), 112-127.
2) Gupta, S., & Sharma, M. (2022). Consumer Perception and Adoption of SBI Credit Cards: A Literature Review. Journal of Marketing Research and Case Studies, 9(1), 55-68.