TITLE : Relationship of Adani Power ltd. With NIFTY 50
AUTHOR :
Anushka Aher
INTRODUCTION : This project is about whether Adani Power ltd. is good for short term or long term investments, in comparison with NIFTY 50. Adani Power Limited (APL), a part of the diversified Adani Group, is the largest private thermal power producer in India. They have a power generation capacity of 15,250 MW comprising thermal power plants in Gujarat, Maharashtra, Karnataka, Rajasthan, Chhattisgarh, Madhya Pradesh, and Jharkhand, and a 40 MW solar power project in Gujarat.
OBJECTIVE : To calculate beta and find its significance
DATA COLLECTION: Data for NIFTY 50 and Adani Power was downloaded from NSE website for the period 1-03-2023 to 28-2-2024. Friday closing prices were calculated and weekly returns of Adani Power ltd. were regressed on weekly returns of NIFTY 50.
DATA ANALYSIS :
Equation : Adani Power Ltd. = -3.16 + 0.78 NIFTY 50
n=38, R2 = 0.034; F= 1.291; P value = 0.2633; t-stats for b = (1.13)
The equation shows the relationship between NIFTY 50 and Adani Power. Positive sign means direct relationship, if one unit increase in the NIFTY 50 index, the Adani Power Ltd. is expected to increase by 0.78 units vice-versa. T-stats for b is given in bracket and the p value for which is given as 0.263, which is less than 0.05 meaning b is statistically significant at 5% level, meaning NIFTY 50 plays a significant role for Adani Power. Number of observations are 38, R2 0.034 meaning 0.34% of Adsni Power is explained by NIFTY 50, balance 99.96% is error due to the variables not taken in the model. F is 1.291 the p value for which is 0.2633 which is less than 0.05, so overall the model is statistically significant.
Conclusion : As the beta value is more than 1, thus the Adani Power ltd. is good for short-term investments.