Author: Ratnesh Singh
Introduction: Reliance Infrastructure, part of the Reliance Group, is a significant Indian infrastructure development business. Its operations include power generation, distribution, and transmission, as well as the construction of highways, metro systems, and airports. The organization has a strong presence in both urban and rural infrastructure projects. Additionally, it provides engineering, procurement, and construction (EPC) services in a variety of industries.
Objective: To find out Beta of Reliance infrastructure & its Significance.
Data Collection: Data for Nifty50 & Reliance infrastructure was downloaded from NSE website, further period 1st June 2023 to 31st May 2024. Data was manipulated to get Friday closing prices & weekly returns were calculated by the Formula: (y_(t+1)-〖 y〗_t)/y_t ×100 . Weekly returns of Reliance infrastructure were regressed on weekly returns of Nifty50.
Data Analysis: Weekly return of Reliance infrastructure = 0.56+1.02 Weekly returns of Nifty 50(0.8411)
N = 37, R2 = 0.020, F = 0.70, P-value = 0.406
The above equation shows the relationship between Nifty 50 & Reliance infrastructure. The positive sign before the coefficient of weekly returns of Nifty 50 means there is positive relationship. If Nifty 50 rise by 1unit, Reliance infrastructure will increase by 1.02 & vice versa. The Coefficient of Nifty 50 has t stat = (0.8411) & the P value of which is 0.406 which is greater than 0.05 meaning Beta is not statistically significant at 5% level and N=37, No of observations are 37. R2 is 0.020 which means 2% of Weekly returns of Reliance infrastructure are explained by Nifty 50. 98% depends upon other factors like fundamentals are other factors. F is 0.70 & the P value of this is 0.406 meaning it is more than 0.05 meaning the overall model is not statistically significant at 5% level.
Conclusion: Beta is greater than 1 (1.02), invest for short term.