Title: Relationship of Linde India with Nifty 50.
Author: Lisha Sawant
Introduction: Linde India Ltd., established in 1935, is a key player in the industrial and medical gases sector. It manufactures gases and builds air separation plants. As of FY 2024, the company has a market capitalization of approximately ₹70,215 crore. It saw revenues of ₹2,768.7 crore, though there was a decline of 12% from the previous year. The company holds a significant market share, with its stock trading near ₹8,181 in October 2024.
Objective: To find out Beta of Linde India Ltd and its significance.
Data Collection: Data of Linde India and Nifty 50 was downloaded from NSE website from the date 01/05/2023 to 30/04/2024. The data was manipulated to get Friday closing prices. Weekly returns of Nifty 50 is taken ‘x’ and weekly return of Linde India Ltd is taken ‘y’. Weekly returns of Linde India Ltd was regressed on weekly return of Nifty50.
Data Analysis:
Weekly return of Linde India Ltd = -0.89 + 0.13 (weekly returns of Nifty 50)
(0.33)
T stat = 0.33
N = 48
R square = 0.23
F = 0.11
P value = 0.74
The above equation depicts the relationship between weekly return of Linde India Ltd and weekly return of nifty 50. The plus sign before the coefficient of nifty50 tells that if nifty 50 rises Linde India Ltd will also rise and vice versa. If nifty 50 rises by 1 unit then Linde India Ltd will rise by 0.13 unit. Figure in the bracket is t stats for beta. P value for which is 0.74 which is more than 0.05 meaning beta is statistically not significant at 5% level. R Square= 0.23 meaning 23% of companies return are explained by nifty 50. The balance 77% is may be due to fundamentals. F is 0.11 and p is 0.74 meaning overall model is not statistically significant.
Conclusion: As Beta for Linde India Ltd is 0.13 which is less than 1. Therefore it is advisable to invest for long term.