Title: RELATIONSHIP OF JSW Steel WITH NIFTY 50
Author: Jeevan Das Bagri
Introduction: JSW Steel Limited is an Indian multinational steel producer based in Mumbai and is a flagship company of the JSW Group. After the merger of Bhushan Power & Steel, Ispat Steel and Jindal Vijayanagar Steel Limited, JSW Steel became India’s second largest private sector steel company.
JSW Steel’s history can be traced back to 1982, when the Jindal Group acquired Piramal Steel Limited, which operated a mini steel mill at Tarapur in Maharashtra and renamed it as Jindal Iron and Steel Company (JISCO). Soon after the acquisition the group set up its first steel plant in 1982 at Vasind, near Mumbai.
Later, in 1994, Jindal Vijayanagar Steel Limited (JVSL) was set up with its plant located at Toranagallu in the Bellary-Hospet area in the State of Karnataka, the heart of the iron ore belt and spread over 10,000 acres (40 km) of land. It is well connected to both the Mormugao Port and Chennai Port and is 340 kilometres from Bangalore. It is said to be the sixth largest steel plant in the world.
In the year 2005, JISCO and JVSL merged to form JSW Steel Limited. It also set up a plant at Salem with an annual capacity of 1 million tonnes.
Objective: To find out Beta of JSW Steel ltd and its significant.
Data Collection: Data for Nifty 50 and JSW Steel 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 JSW Steel ltd was regressed on weekly returns of Nifty 50.
Data Analysis: Weekly return of JSW Steel ltd = 0.54 + (1.46)
N = 46, R2 = 0.4259, t stat = (1.5248), F = 31.9111, P-value = 1.1820
The above equation shows the relationship between Niffty50 & JSW Steel ltd. The positive sign before 1.46 means if Nifty decrease Rattan power India ltd raises & vice versa. The Coefficient of Nifty50 has t stat = (1.5248) & the P value of which is 1.1820 meaning Nifty50 is not statistically significant. To increase the prices of JSW Steel ltd, R2 is 0.4259 meaning 42.59% of JSW Steel ltd prices are explained by Nifty50. 57.41% dependents upon other factors like fundamentals are other factors. F is 31.9111 & the P value of this is 1.182 meaning it is more than 0.05 meaning the overall model is not statistically significant.
Conclusion:
1.46 coefficient is positive, so Rattan power India ltd is good for short term investment.