Title – Relationship of AU Small Finance Bank Ltd with Nifty 50
Author : Anupa Shivram Rao
Introduction : AU Small Finance Bank Ltd was founded in 1996 by Sanjay Agarwal (managing director and CEO of AU Small Finance Bank) as a private limited company then listed in publicly on 29 June 2017.ASFB headquartered in Jaipur, Rajasthan, Indian. It offers services including investment services, payment solution, online banking, mobile banking, advisory and financial services, UPI payment services, among others.
Objective : To find out the Beta of AU Small Finance Bank Ltd and its significance
Data collection : Data for Nifty (50) & AU Small Finance Bank Ltd was downloaded from the NSE website for the period 01/06/2023 to 30/05/2024. Data was manipulated to find out Friday’s close price and weekly returns of AU Small Finance Bank Ltd and Nifty (50) were calculated. The weekly return of AU Small Finance Bank Ltd denoted as ‘y’ and weekly return of Nifty (50) denoted as ‘x’. y was regressed on x . How I calculated weekly returns is (Yt+1-Yt)/Yt*100
Data Analysis :
Weekly Return of AU Small Finance Bank Ltd = -0.74+0.80 Weekly returns of Nifty
(1.90)
N=48, R Square=0.07, F=3.62, P-value=0.06
Interpretation :
- The above equation shows the relationships between weekly returns of Nifty 50 and AU Small Finance Bank Ltd. The positive sign before the co-efficient of the weekly return of Nifty means there is positive relationship. If Nifty raises by 1 unit AU Small Finance Bank Ltd will raises by
(Y=-0.74+0.80x)0.8 unit and vice-versa
- t-start for Beta is 1.90 which is written is bracket and P-value is 0.06 which is less than 0.05 meaning beta is statistically significant at 5% level
- N=48, means number of observation are 48
- R-Square = 0.07 which mean 7% of the weekly return of AU Small Finance Bank Ltd are explained by nifty
- F= 3.62 and P-value=0.06 meaning overall the model is statistically significant at 5% level
Conclusion: As my beta is more 1 I can invest for short term.