TITLE: Relationship of SRIRAM FINANCE LTD with Nifty 50
AUTHOR: SUMIT KUMAR (021330424032)
INTRODUCTION:
Shriram Finance is the country’s one of the biggest retail NBFC offering credit solutions for commercial vehicles, two-wheeler loans, car loans, home loans, gold loans, personal and small business loans. Part of the 49 year old Shriram Group, a financial conglomerate that has emerged as a trusted partner in creating transformative experiences and lasting impressions in customers’ lives.
Object: To find out the beta (β) of Sriram finance and its significance.
Data Collection: The data was collected by taking the weekly return of NSE (National Stock Exchange) , NIFTY50 and Sriram finance of dated time period of 1 year from 1st May 2023 to 30th April 2024 with the help of NSE site. Friday closing price and weekly return was calculated by formula.
Weekly return of Nifty was taken as (X) in terms of company (Sriram finance ) as Y is taken. Y was regressed on X.
Data analysis: Regression equation; Y ( Intercept)= Sriram finance + NIFTY 50
Relationship of Nifty 50 and Sriram finance = 1.329 + (-0.113) (-0.817) {t-stat})
N = 48, = 0.014313, F = 0.6679, P(VALUE)= 0.418
The above equation shows the relationship between Nifty 50 and Sriram finance positive sign before the co-efficient of Nifty 50 .Tells us that there is a relationship if nifty rise by 1unit , company will rise by 1.33.
And vice versa as the co-efficient of t stats as (-0.817) for beta. The p value for which is 0.4179 which is more than 0.05 meaning beta is statistically not significant.
N=48, =0.014313 which means 1.43% of Sriram finance return are explained by Nifty 50. Other (98.57%) are variable explained not in model.
f= 0.668 and p value for that variable is 0.0187,it is less than 0.050 meaning overall model is statistically significant at 5% level.
Conclusion: The given data shows RELATIONSHIP OF Sriram finance with NIFTY50. We know that: – 0.113 <1 and negative , means company Sriram finance is not good for investment.
