Title: RELATIONSHIP OF RATTAN POWER INDIA LTD WITH NIFTY 50
Author: RAJESH CHOUDHARY
Introduction: RATTAN INDIA POWER LIMITED is one of India’s largest private power generation companies, with installed capacity of 2,700 MW thermal power plants at Amravati and Nashik (1,350 MW at each location) in Maharashtra, India with investments of Rs. 18,615 crores (US $2.5 Billion). The power plants are spread over an area of 2,400 acres. The company counts marquee funds like Goldman Sachs and Varde Partners, USA as investors in the business. The Group has created a world class power generation asset with its deep focus on execution using best in class equipment and technology. Rattan India Power Ltd (Rattan India), formerly India bulls Power Ltd, is an electric utility. The company develops power projects and generates electricity. The company produces power using coal. Rattan India has interests in Amravati and Nasik thermal power projects in Maharashtra. Under power purchase agreements, it supplies electricity to Maharashtra State Electricity Distribution Company Limited. Through long-term fuel supply agreements with South Coalfields Limited and Mahanadi Coalfields Limited, the company secures coal. Rattan India is headquartered in New Delhi, India.
Objective: To find out Beta of Rattan power India ltd and its significant.
Data Collection: Data for Nifty 50 and RATTAN POWER INDIA LTD was downloaded from NSE site for the period 01st April 2023 to 31st March 2024. Data was manipulated to get Friday closing prices and weekly returns were calculated by the formula: (Yt-1 – Yt) / Yt*100 weekly returns of Rattan power India ltd was regressed on weekly returns of Nifty 50.
Data Analysis:
Weekly return of Rattan power India ltd = -1.58 + (0.83) Weekly Return of Nifty
N = 46, R2 = 0.0192, F = 0.8645, P-value = 0.3575 (-1.2868)
The above equation shows the relationship between Niffty50 & Rattan power India ltd. The positive sign before 0.83 means if Nifty decrease Rattan power India ltd raises & vice versa. The Coefficient of Nifty50 has t stat = (0.9297) & the P value of which is 0.3575 meaning Nifty50 is not statistically significant. To increase the prices of Rattan power India ltd, R2 is 0.0192 meaning 1.92% of Rattan power India ltd prices are explained by Nifty50. 98.08% dependents upon other factors like fundamentals are other factors. F is 0.8645 & the P value of this is 0.3575 meaning it is more than 0.05 meaning the overall model is not statistically significant.
Conclusion:
0.83 coefficient is positive, so Rattan power India ltd is good for long term investment.