Title: Relationship of Tata motors Limited with Nifty 50
Author: Tejas Suryawanshi
Introduction: Tata Motors Limited is an Indian multinational automotive company, headquartered in Mumbai and part of the Tata Group. The company produces cars, trucks, vans, and busses. Subsidiaries include British Jaguar Land Rover and South Korean Tata Daewoo. Tata Motors has joint ventures with Hitachi (Tata Hitachi Construction Machinery) which makes vehicle parts for Fiat Chrysler and Tata-branded vehicles. On 12 October 2021, private equity firm TPG invested $1 billion in Tata Motors’ electric vehicle subsidiary.
Objective: To calculate Beta and find its significance.
Data Collection: Data for Nifty 50 and Tata Motors Limited was downloaded from NSE site for the period 1-3-2023 to 28-2-2024. Friday closing prices were calculated and weekly returns were found out. Weekly returns of Tata motors limited were regressed on weekly returns of Nifty 50.
Data Analysis: Returns of Tata motors = -1.527 – 0.090 Return of Nifty50
(-0.271)
Observations(n)= 48, R Square= 0.001, F = 0.0733, P value = 0.788
The above equation shows the relationship between Nifty 50 and Tata motors limited, negative sign means inverse relationship. If returns of Nifty 50 rises then the returns of Tata motors limited falls and vice versa. If returns of Nifty 50 rises by Rupee 1, returns of Tata motors limited will fall by Rupee 0.090 vice-versa. t Stat for b is given -0.271 and P value for it is given as 0.788 which is more than 0.05 meaning b is not statistically significant at 5% level meaning returns of Nifty 50 does not play a significant role for returns of Tata Motors limited. Number of observations is 48. R Square is 0.001 meaning 0.14% of returns of Sun pharmaceuticals Industries limited is explained by Nifty 50 balance 99.86% is error due to the variables not taken into the model. F is 0.0733, the P value is 0.788, which is more than 0.05 so the overall model is not statistically significant.
Conclusion: Beta is -0.091 which is less than 1, so Tata motors is good for long term investment.