Title: Relationship of Aditya Birla Capital Limited (ABCL) with Nifty 50
Author: Avani Agarwal
Introduction: Aditya Birla Capital Limited (ABCL) is a financial services holding company of the Aditya Birla Group. It offers a wide range of financial solutions to individuals and businesses. ABCL has a strong presence in India with over 1,500 branches and 200,000 agents. As of June 2024, ABCL manages assets worth Rs 4.63 lakh crore. It is part of the Aditya Birla Group, a global conglomerate with operations in over 40 countries.
Objective: To find out beta of ABCL and its significance
Data collection: The data of Nifty 50 and ABCL was downloaded from NSE website, i.e., nseindia.com for the period of 1-6-23 to 31-5-24. The data was shaped to find out Friday’s closing price and its Weekly returns were calculated. Weekly return [(yt+1 – yt)/yt*100] of Nifty 50 was termed as X and of ABCL as Y. Then, Y was regressed on X.
Data analysis: Regression Equation=
Weekly return of ABCL = -0.67 + 0.15 weekly return of nifty
(0.98)
N= 48
R2 = 0.02
F = 0.95
P-value = 0.33
The above equation shows the relationship between Nifty 50 and Weekly return of ABCL. The positive sign before the coefficient of weekly return of nifty tells us that there is a positive relationship. If Nifty rises by 1 unit, ABCL will rise by 0.15 unit and vice versa.
Figure in bracket is t-stat for beta and p-value is 0.33, which is more than 0.05 meaning that model is not statistically significant.
R2 is 0.02, which means only 2% of weekly return of Company are explained by Nifty.
F= 0.95 and p-value for that is 0.33 meaning overall model is statistically significant.
Conclusion: As the beta of ABCL (0.15) is less than 1 but positive, it would be advisable to invest for long term.