Title: Relationship of of RBL Bank with Nifty 50.
Author: Rainy Devare
Introduction: RBL Bank currently services over 15.90 million customers through a network of 545 branches; 1,261 business correspondent branches (of which 297 banking outlets) and 398 ATMs spread across 28 Indian states and Union Territories. RBL Bank is listed on both NSE and BSE (RBLBANK).
Objective: To find out Beta of RBL Bank & its Significance.
Data Collection: Data for Nifty50 & RBL Bank was downloaded from NSE website, further period1st April 2023 to 31st March 2024. Data was manipulated to get Friday closing prices & weekly returns were calculated by the Formula: . Weekly returns of RBL Bank were regressed on weekly returns of Nifty50.
Data Analysis: Weekly return of RBL Bank = -0.83 + 0.21 Weekly returns of Nifty 50(0.277)
N = 45, R2 = 0.002, F = 0.08, P-value = 0.783
The above equation shows the relationship between Nifty 50 & RBL Bank. The Positive sign before the coefficient of weekly returns of Nifty 50 means there is Positive relationship. If Nifty 50 rise by 1unit, RBL Bank will increase by 0.21 & vice versa. The Coefficient of Nifty 50 has t stat = (0.278) & the P value of which is 0.783 which is greater than 0.05 meaning Beta is not statistically significant at 5% level and N=45, No of observations are 45. R2 is 0.002 which means 0.2% of Weekly returns of RBL Bank are explained by Nifty 50. 99.8% depends upon other factors like fundamentals are other factors. F is 0.08 & the P value of this is 0.783 meaning it is more than 0.05 meaning the overall model is not statistically significant at 5% level.
Conclusion: Beta is Positive (0.21), short term investment.