Report
Relationship of Power Grid Corporation of India Limited with Nifty 50
Author: Prasad Gulve
, ITM Business School, Kharghar, Maharashtra, India
* Corresponding Author E-mail- prasadgulve2349@gmail.com
Introduction: Power Grid Corporation of India Limited (PGCIL) is a key public sector enterprise established in 1989, responsible for electricity transmission across India. Headquartered in Gurugram, it operates over 1,60,000 circuit kilometres of transmission lines and more than 260 substations. Listed on the NSE and BSE, PGCIL is dedicated to sustainable practices and renewable energy integration, supporting the nation’s energy security and economic growth. Its mission is to ensure a reliable and efficient power supply to meet the growing demands of the country.
Objective: To find out βeta of Power Grid Corporation of India Limited and its significance.
Data Collection: Data for Nifty 50 and Power Grid Corporation of India Limited was downloaded from https://www.nseindia.com/ for the period 1st June 2023 to 30st May 2024. Data was manipulated to get Friday closing prices and weekly returns were calculated using formula (Yt+1 – Yt) / Yt * 100. Weekly returns of Power Grid Corporation of India Limited were regressed on weekly returns of Nifty 50.
Data Analysis:
Weekly Returns of Power Grid Corporation of India Limited = 0.41 + 0.008 Weekly Returns of Nifty
N = 49, R2 = 0.001, F = 0.06, P-value = 0.80 (0.25)(t stat)
Interpretation:
The above equation shows the relationship between Nifty 50 and Power Grid Corporation of India Limited. The positive sign before 0.01 means there is a positive relationship if Nifty 50 rises by 1-unit of Power Grid Corporation of India Limited will rise 0.008 and vice versa. The coefficient of Nifty 50 has t Stat = 0.25, the P-value of which is 0.80. It is more than 0.05 meaning Nifty 50 is not statistically significant to increase the price of Power Grid Corporation of India Limited. R2 is 0.001 meaning 0.1% of Power Grid Corporation of India Limited prices are explained by Nifty 99.9% depends upon other factors like fundamentals. F is 0.06 and P-value is 0.80 meaning it is more than 0.05 meaning overall model is not statistically significant at 5% level.
Conclusion: Power Grid Corporation of India Limited is good for short term investment if nifty is at low.