Author: Yashwant Venkataramane Gowda
Introduction:
Yes Bank (stylised as YES BANK) is an Indian private sector bank, headquartered in Mumbai, catering to retail customers, MSMEs, and corporate clients. The bank was founded by Rana Kapoor and Ashok Kapur in 2003.[5] Its network is spread across 300 districts in India and comprises 1,198 branches, 193 BCBOs and 1,287+ ATMs
OBJECTIVE:
To find out the beta value of Yes Bank ltd and its significance.
Data Collection:
The data of Yes Bank Ltd and Nifty 50, from the period 01.05.2023 to 30.04.2024, was downloaded from NSE’s official website nse.india.
Data was manipulated to find Friday closing prices.
The weekly returns of Yes Bank Ltd and the weekly returns of Nifty 50 were calculated.
The weekly return of Nifty-50 is X and the weekly return of Yes Bank Ltd is Y.
Lastly, the weekly returns of Yes Bank Ltd (Y) were regressed on weekly returns of Nifty 50 (X).
Data Analysis:
Equation
Weekly Returns of Yes Bank Ltd= -0.52 -0.69 weekly Return of Nifty-50
N (no. of observation)= 48
R2 = 0.02
F-Stat= 0.94
P-Value=0.34
The above equation depicts the relationship between the weekly returns of Yes Bank Ltd and the weekly returns of Nifty-50. The plus (+) sign before the coefficient of Nifty-50 tells that if Nifty-50 rises, then company value rises too, and vice-versa.
If Nifty-50 rises by 1 unit, the company value will rise by 0.92 units. The figure in the bracket is t-stat for beta and the p-value for which is 0.219, which is less than 0.5, meaning beta is statistically significant at 5 percent levels of significance.
R2 value is 0.02, meaning 20 percent of Yes Bank returns are explained by Nifty-80, the balance 80 percent are maybe due to fundamentals.
F-stat value is 0.94 and the p-value is 0.34, meaning that the overall model is statistically significant.
Conclusion:
The Beta value for weekly of Nifty-50 is negative (β= -0.67), than significantly the company should be avoided for the Investment.