Relationship of Tata Motors limited with Nifty 50
Author: Tanay Ghatode1*
, ITM Business School, Kharghar, Maharashtra, India
* Corresponding Author E-mail: tanayg6803@gamil.com
Introduction: Tata Motors Limited is an Indian multinational automotive company, headquartered in Mumbai and part of the Tata Group. The company produces cars, trucks, vans, and buses. Tata Motors is listed on the BSE and NSE, and is a constituent of the BSE SENSEX and NIFTY 50 benchmark indices.
Objective: To find out βeta of Tata Motors Limited and its significance.
Data Collection: Data for Nifty 50 and Tata Motors Limited was downloaded from https://www.nseindia.com/ for the period 1st June 2023 to 30st May 2024. Data was manipulated to get Friday closing prices and weekly returns were calculated using formula (Yt+1 – Yt) / Yt * 100. Weekly returns of Tata Motors Limited were regressed on weekly returns of Nifty 50.
Data Analysis:
Weekly Returns of Tata Motors= 0.43 + 0.01 Weekly Returns of Nifty
N = 49, R2 = 0.001, F = 0.07, P-value = 0.78 (0.27)(t stat)
Interpretation:
The above equation shows the relationship between Nifty 50 and Tata Motors Limited. The positive sign before 0.01 means there is a positive relationship if Nifty 50 rises by 1-unit Tata Motors will rise 0.01 and vice versa. The coefficient of Nifty 50 has t Stat = 0.275, the P-value of which is 0.78. It is more than 0.05 meaning Nifty 50 is not statistically significant to increase the price of Tata Motors Limited. R2 is 0.001 meaning 0.1% of Tata Motors Limited prices are explained by Nifty 99.9% depends upon other factors like fundamentals. F is 0.07 and P-value is 0.78 meaning it is more than 0.05 meaning overall model is not statistically significant at 5% level.
Conclusion: As β<1 (i.e. 0.01), then investment in Tata Motors for long term will be good.