RELATIONSHIP OF ADANI ENERGY SOLUTIONS LTD WITH NIFTY50
AUTHOR: Ayush Kumbhar
INTRODUCTION
Company Overview
Adani Energy Solutions Ltd is a subsidiary of the Adani Group, a diversified Indian conglomerate. Adani Energy Solutions focuses on providing end-to-end energy solutions, including solar energy, energy storage, and electric vehicle charging infrastructure.
Adani Energy Solutions Ltd was established in 2020 as a part of the Adani Group’s strategic expansion into the renewable energy and energy solutions sector.
OBJECTIVE
To find out beta of Adani Energy Solutions Ltd and its significance.
DATA COLLECTION
The company data was downloaded from the date of 1-5-2023 to the date of 30-4-2024 form NSE India.com and the data was filtered for only weekly returns. This data is used for finding out the Friday closing prices for Nifty 50 and Adani Energy Solutions Ltd.
Weekly return is calculated by using the mentioned formula (Yt+1 – Yt) / Yt * 100
Weekly return of the Nifty50 denotes “X”
Weekly return of the company denotes “Y”
“Y” was regressed on “X”.
DATA ANALYSIS
Weekly return of Adani Energy Solutions Ltd is 0.47
Weekly return of Nifty50 is -0.86
(t stat is β which is 0.49)
- N = 48
- R2 = 0.03
- f = 1.53
- ρ value = 0.62
Above equation shows the relation between Nifty50 and Adani Energy Solutions Ltd. Positive sign before the coefficient of nifty50 tells us that there is a positive relationship if nifty rises by 1 unit Adani Energy Solutions Ltd will also rise by 0.90 and negative sign before the coefficient of nifty50 tells us that there is a negative relationship if nifty drop away by 1 unit Adani Energy Solutions Ltd will also drop by 0.90. Figure in brackets is t stats is Beta and the p value which is 0.62 is more than 0.50 meaning beta is not statistically significant
Number of observations are 48.
R2 = 0.03 which means 3% of Adani Energy Solutions Ltd return are explained by nifty 50.
F= 1.53 and ρ value for that is 0.62 which is greater than 0.50 meaning overall model is not statistically significant.
CONCLUSION
β< 1 and positive (less than 1) means good for long term investment.