Title: RELATIONSHIP OF JSW STEEL LTD WITH NIFTY 50
Author: JYOTI RANJAN SAHOO
Introduction: JSW Steel Limited is one of India’s leading integrated steel manufacturers, headquartered in Mumbai, Maharashtra. Founded in 1982 by Sajjan Jindal the company has grown to become a prominent player in the global steel industry with a strong presence across the entire value chain of steel production from mining and processing iron ore to manufacturing and marketing a diverse range of steel products. JSW Steel’s product portfolio includes flat products, long products, plates, and coils, catering to various industries such as automotive, construction, infrastructure and consumer durables.
Some key highlights of JSW Steel Limited include:
– Crude steel production capacity of 27 MTPA (million tonnes per annum)
– Five state-of-the-art manufacturing facilities across India located in Vijayanagar, Dolvi, Salem, Vasind and Tarapur
– Revenue of ₹2,42,684 crore and net profit of ₹7,555 crore in FY 2022
– Market capitalization of approximately ₹1,50,000 crore
– Awards and recognitions for quality, sustainability and innovation, including ‘World’s Most Competitive Steel Producer’ by World Steel Dynamics
JSW Steel has also made significant strides in sustainability and corporate social responsibility (CSR), focusing on:
– Environmental stewardship through energy-efficient practices and renewable energy sources
– Community development initiatives in education, healthcare, and skill development
– Innovative research and development to reduce carbon footprint and improve product quality
Objective: To find out Beta of JSW Steel Limited and its significant.
Data Collection: Data for Nifty 50 and JSW Steel Limited was downloaded from NSE website 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 Limited was regressed on weekly returns of Nifty 50.
Data Analysis: Weekly return of JSW Steel Limited = -0.59 + (0.46)
N = 46, R2 = 0.0405, t stat = (1.3632), F = 1.8584, P-value = 0.1797
The above equation shows the relationship between Niffty50 & JSW Steel Limited. The positive sign before 0.46 means if Nifty decrease JSW Steel Limited raises & vice versa. The Coefficient of Nifty50 has t stat = (1.3632) & the P value of which is 0.1797 meaning Nifty50 is not statistically significant. To increase the prices of JSW Steel Limited, R2 is 0.0405 meaning 4.05% of JSW Steel Limited prices are explained by Nifty50. 95.95% dependents upon other factors like fundamentals are other factors. F is 1.8584 & the P value of this is 0.1797 meaning it is more than 0.05 meaning the overall model is not statistically significant.
Conclusion:
0.4643 coefficient is positive, so JSW Steel Limited is good for long term investment.