Title: Relationship of Adani Power with Nifty 50.
Authors: Anjali Singh
Introduction: Adani Power, one of India’s largest private power
producers, focuses on thermal and renewable energy generation. From
April 1, 2023, to March 31, 2024, its share performance experienced
significant volatility, with impressive rises driven by strong earnings and
favourable regulations followed by corrections. Given this
unpredictability, it may be wise to avoid investing in Adani Power if you
seek stability and consistent returns.
Objective: To find out Beta of Adani Power and its significance.
Data collection: Data for Nifty 50 and Adani Power was downloaded
from NSE site from the period 1-4-2023 to 31-3-2024. The Data was
manipulated to get Friday closing price and weekly returns were
calculated by using formula (Yt-1 – Y t) Yt * 100. Weekly returns of Adani
Power were regressed on weekly return of Nifty 50.
Data analysis:
Weekly returns of Adani Power = -2.20 + weekly returns of Nifty -0.71
-1.0159
N= 35, R2=0.0303, F=1.0319, P value= 0.3171
The above equation shows the relationship between Nifty 50 and Adani
Power. The negative sign before 0.71 means if Nifty 50 decline Adani
Power will also decline and vice versa. The coefficient of Nifty 50 has t-
stat=-1.0159 and P value of which is 0.3171. It is more than 0.50
meaning Nifty 50 is not statistically significant to increase the prices of
Adani Power R
2=0.0303 meaning 0.01% of Adani Power prices are
explained by Nifty 50, 99.9% depends upon other factors like
fundamentals. F=1.0319 and the P-value for this is 0.3171 meaning it is
more than 0.05 means overall model is statistically significant.
Conclusion: As -0.71 is in negative relationship, it is advisable to avoid
investing in this stock.