Relationship of Asian Paints Ltd with Nifty 50
Author: Amisha Poojari
1 F3 2023-2024 – 021330024049, ITM Business School, Kharghar, Maharashtra, India
Introduction: Asian Paints Ltd is an Indian multinational paint company, headquartered in Mumbai. It is the India’s Largest and Asia’s third – Largest paints corporation. The company along with its subsidiaries have 27 manufacturing facilities across 15 countries serving customer globally in over 60 countries.
Objectives: To find out the Beta of Asian Paints Ltd and its significance.
Data Collection: Data for Nifty 50 and Asian Paints Ltd was downloaded from NSE for the period 1st May 2023 to 30th April 2024. Data was manipulated to get Friday closing prices and weekly returns were calculated X is for Nifty 50 and Y for Asian Paints using the formula (Yt+1 – Yt) 1/t * 100. Weekly returns of Asian Paint Ltd were regressed on weekly returns of Nifty 50.
Data Analysis: Regression equation for weekly returns of Asian Paints Ltd = 0.50 +0.78 Weekly returns of Nifty 50. B- t-stat = 1.32, N= 48, R 2 = 0.14, F = 7.75, PV (Significant value) = 0.008
The above equations show the relationship between Nifty 50 and the Asian Paints Ltd. The Positive sign before the co-efficient (0.78) of Nifty 50 tells us that there is the positive relationship if Nifty rises by 1 unit the Asian Paints Ltd will also rises and wise versa. Figure in bracket is t-stat for beta which is 1.32 and P value for which is 0.008 which is greater than 0.05 meaning the overall model is not statistically significant. N= 48, R 2 = 0.14 which means 14% of Asian Paints Ltd return are explained by Nifty 50. F = 7.75 and PV = for that is 0.08 which is more than 0.05 meaning overall model is not statistically significant at 5% level.
Conclusion: Asian Paints Ltd is good for the short-term investments.