Title:- Relationship of NTPC with Nifty 50.
Author:- Nancy
Introduction:- NTPC (National Thermal Power Corporation) is India’s largest power producer, mainly generating electricity from coal, gas, and renewables. Established in 1975, it plays a vital role in India’s energy sector. NTPC’s share price in October 2024 is around ₹220-230, driven by energy demand and its focus on renewable expansion.
Objective:- To find out beta of NTPC and its significance
Data Collection:- Data of NTPC and Nifty 50 was downloaded from date 1 May 2023 to 30 April 2024 from NSE . The data was manipulated to get Friday closing prices. Weekly return of Nifty 50(X) and weekly return of NTPC(y).Weekly return of Nifty 50 was regressed on weekly return of NTPC.
Data Analysis:- Weekly return of NTPC = -1.27 + (-0.34)weekly return of Nifty 50
(-0.895) = t stat
N = 47, R square = 0.02 , F = 0.80 , P value =0.375
Interpretation:- The above equation shows the relationship between weekly return of NTPC and weekly return of Nifty 50. The plus sign before the coefficient of Nifty 50 tells that if Nifty rises NTPC will also rise and vice versa. If Nifty rise one unit ,NTPC rises by 0.90 unit. Figure in the bracket is t stat for beta. P value for which is 0.375 which is more than 0.5, meaning beta is not statistically significant at 5% level. R square is 0.02 meaning 20% company’s return is explained by Nifty 50. The balance 80% may be due to fundamentals. F is 0.801 and P value is 0.375, meaning overall model is statistically insignificant.
Conclusion:-Beta is negative (-0.34). Avoid this company