Title: Relationship of Kotak Mahindra Bank Ltd with Nifty-50
Author: Keshav Ishwar Goel
Introduction
Kotak Mahindra Bank Ltd., established in 1985, is one of India’s leading private sector banks. Originally a financial services company, it received its banking license in 2003. With a robust network of branches and ATMs across the country, Kotak Mahindra Bank offers a wide range of financial products and services, including retail banking, corporate banking, investment banking, and wealth management.
The bank is known for its customer-centric approach, innovative solutions, and commitment to technology-driven banking. Kotak Mahindra Bank aims to empower individuals and businesses by providing accessible and reliable banking services, fostering financial inclusion, and contributing to the economic growth of India.
Objective
To find out the beta value of Kotak Mahindra Bank Ltd and its significance.
Data Collection
The data of Kotak Mahindra Bank Ltd and Nifty 50, from the period 01.05.2023 to 30.04.2024, was downloaded from NSE’s official website nse.india.
Data was manipulated to find Friday closing prices.
The weekly returns of Kotak Mahindra Bank Ltd and the weekly returns of Nifty 50 were calculated.
The weekly return of Nifty-50 is X and the weekly return of Kotak Mahindra Bank Ltd is Y.
Lastly, the weekly returns of Kotak Mahindra Bank Ltd(Y) were regressed on weekly returns of Nifty 50 (X).
Data Analysis
Equation
Weekly Returns of Kotak Mahindra Bank Ltd = 0.82 + 0.92 Weekly Returns of Nifty-50
|
N (no. of observations) |
49
|
|
R2 |
0.212521
|
|
F-stat |
12.41428
|
|
p-value |
0.00
|
Interpretation: The above equation shows the relationship between weekly returns of Nifty 50 and Kotak Mahindra Bank Ltd. The negative (+) sign before the co-efficient of Nifty 50 tells that if Nifty 50 rises, Kotak Mahindra Bank Ltd will be also rise and vice versa. If Nifty rise by 1 unit, Kotak Mahindra Bank Ltd will rise by (0.934) unit. The figure in the bracket is t-stat for beta and the p-value for which is 0.0009, which is less than 0.5, which means that beta is statistically significant at 5% level.
R^2=0.212 which means 21.2% of Kotak Mahindra Bank Ltd returns are explained by Nifty 50, the balance 78.8% is due to fundamental.
F=12.41 and P value=0.0009, which means that overall model is statistically significant at 5% level.
Conclusion- As per the given data of RELATIONSHIP OF Kotak Mahindra Bank Ltd WITH NIFTY50. We come at the conclusion that the Beta value > 0 and Beta value < 1, which means that long team investment in this company for investment.