TITLE: Relationship of Nifty 50 with Railtel Corporation of India Limited.
AUTHOR: Riya H Shah
INTRODUCTION: Railtel Corporation of India is a “Mini Ratna (Category-I)” PSU, with a Pan-India optic fiber network in the ICT sector. Railtel has been at the forefront in modernizing telecom infrastructure for railway operations and generating revenues through Broadband networks since its inception in 2000. Railtel is a leader in critical connectivity services as it covers over 61000+ route kilometers and 6108+ railway stations. Railtel, through collaborations with Indian Railways, has undertaken significant initiatives like National Knowledge Network that have firmly positioned it as one of India’s leading telecommunication providers.
OBJECTIVE: To find out Beta of Railtel Corporation of India Limited and its Significance.
DATA COLLECTION: Data for Nifty 50 and Railtel Corporation of India has been downloaded from NSEindia.com for the period 1-2-23 to 31-2-24. Weekly closing prices were found out. Weekly returns were calculated. Weekly returns of Railtel Corporation of India were regressed on weekly returns of Nifty.
DATA ANALYSIS: Format of Regression equation is Y = a + B(X)
Equation of regression of weekly returns of Railtel Corporation Of India Limited on weekly returns of Nifty 50 Index + weekly returns of Railtel Corporation Of India Limited = 2.4057 + 1.2459 x weekly returns of Nifty 50 Index
Where,
Number of Observations = 48,
R Square = 0.05140,
F = 2.49222,
P-value = 0.12127
Interpretation:
- The above equation shows relationship between weekly returns of Railtel Corporation of India Limited Company and weekly returns of Nifty 50 Index.
- Positive sign means direct relation, meaning if weekly returns of Nifty 50 Index rise then weekly returns of Railtel Corporation of India Limited Company also rise and vice-versa.
- If weekly returns of Nifty 50 Index rise by 1-unit, weekly returns of Railtel Corporation of India Limited Company will rise 1.2459 by unit and vice-versa.
- Figure in bracket shows t-stat for B, P-value for which is 0.12127, which is greater than 0.05 meaning ß is not statistically significant at 5% significance level.
- Number of Observations are 48, R-square value is 0.05140 meaning 5% of weekly returns of Railtel Corporation of India Company Limited are explained by weekly returns of Nifty 50 Index. Balance 95% is error due to other variables which are not in the model.
- F is 2.49222, the P-value of which is 0.12127, which is more than 0.05 meaning overall, the model is not statistically significant at 5% significance.
CONCLUSION: As Beta 1.2459 is more than 1, Railtel Corporation of India Limited Company is good to invest for Short Term.