Title: Relationship of Axis Bank LTD with Nifty50
Author: Anushka S. Dhale
Introduction: Axis Bank Limited, formerly known as UTI Bank (1993–2007), is an Indian multinational banking and financial services company headquartered in Mumbai, Maharashtra. It is India’s third largest private sector bank by assets and Fourth largest by Market capitalisation. The Bank offers the entire spectrum of financial services to customer segments covering Large and Mid-Corporates, MSME, Agriculture and Retail Businesses.
Objective: To calculate Beta and find its significance
Data collection: Data for Nifty 50 and Axis Bank LTD was downloaded from NSE site for the period 01-03-2023 to 28-02-2024. Friday closing prices were calculated and weekly returns were found out. Weekly returns of Axis Bank LTD were regressed on weekly returns Nifty 50.
Data analysis: Axis Bank returns=0.2975 + 0.528 Nifty 50 returns
(1.9083)
n= 48
R2=0.0733
F=3.6419
P value=0.0625
Interpretation: The above equation shows the returns between Nifty50 and Axis Bank LTD. Positive sign shows Direct relationship, if returns of Nifty50 increases, the returns of Axis Bank LTD increases and vice versa. If Nifty50 returns increase by 1 unit, Axis Bank LTD returns increases by 0.52 units and vice versa. T stat for b is given in brackets as 1.90 and p value for this is 0.06 which is more than 0.05 meaning b is not statistically significant at 5% level meaning Nifty50 return does not play a significant role for Axis Bank LTD return. Number of observations are 48. R2 is 0.07 meaning 7% of Axis Bank LTD returns is explained by Nifty50 returns. Balance 93% is error due to the variable not taken in the model. F value is 3.6419, P value for which is 0.0625 which is more than 0.05. So, the overall model is not statistically significant.
Conclusion: Beta is 0.528 which is less than 1, so Axis bank Ltd is good for long term Investment.