Relationship of NTPC Limited with Nifty 50
Author: Nandini Tamilan*
1 F2 2024-26 – 021330124034, ITM Business School, Kharghar, Maharashtra, India
* Corresponding Author E-mail: tamilannandini@gmail.com
Introduction: NTPC (National Thermal Power Corporation) Limited operates across power generation (thermal, solar, hydro), consultancy, power trading, and coal mining, with a growing focus on renewable energy. Over the last 3 years, the company has achieved a return on equity of 12.9%, driven by its capital-intensive operations and ongoing investments in infrastructure and renewable projects.
Objective: To find out the Beta of NTPC Limited and its significance.
Data Collection: Data for Nifty 50 and NTPC Limited was downloaded from https://www.nseindia.com/ from 1st April 2023 to 31st March 2024. Data was manipulated to get Friday closing prices and weekly returns were calculated using the formula (Yt+1-Yt)/Yt*100. Weekly returns of NTPC Limited were regressed on weekly returns of Nifty 50.
Data Analysis:
Weekly Returns of Prestige = -1.23+ 0.24Weekly Returns of Nifty
N = 48, R2 = 0.010, F = 0.45, P-value = 0.51 (-0.67)
The above equation shows the relationship between Nifty 50 and NTPC Limited. The positive sign before 0.24 means that if Nifty 50 rises, NTPC Limited rises and vice versa. The coefficient of Nifty 50 has t Stat – 0.67, the P-value of which is 0.51. It is more than 0.05 meaning Nifty 50 is not statistically significant to increase the price of NTPC Limited. R2 IS 0.010 meaning 0.1% of NTPC Limited prices are explained by Nifty 50. 99.9% depends upon other factors like fundamentals. F is 0.45 and the P-value is 0.51 meaning it is more than 0.05 meaning the overall model is not statistically significant.
Conclusion: NTPC (National Thermal Project Corporation) is good for long-term investment.