Title: Relationship of Sundaram Ltd. with Nifty 50
Author: Shashwat Shrivastava
Introduction: SBI Cards and Payment Services is a leading credit card issuer in India, providing a variety of credit card options tailored to meet diverse customer needs. The company focuses on delivering innovative payment solutions and enhancing customer experience. The total number of equity shares is 13,56,55,000 with a face value of ₹10 each. The symbol of the SBI Cards share is SBICARD.
Objective: To find out Beta of SBI Cards and Payment Services and its significance.
Data Collection: Data of SBI Cards and Payment Services and Nifty 50 was downloaded from 01/06/23 to 31/05/24 taken from NSE, then data is manipulated to get Friday closing prices.
Weekly returns of Nifty 50 were taken as X and weekly return of SBI Cards and Payment Services is taken as Y, then weekly returns of both were calculated, Weekly return of SBI Cards and Payment Services was regressed on weekly returns of Nifty 50.
Data Analysis:
Weekly return of SBI Cards and Payment Services = 0.42 + -(0.026) weekly return of Nifty 50
-(0.29)
N = 49, R square = 0.0019, F = 0.089, P value = 0.76
Interpretation: The above equation depicts the relationship between the weekly returns of SBI Cards and Payment Services and the weekly returns of Nifty 50. The negative sign before the coefficient of Nifty 50 indicates that if Nifty rises, the returns of SBI Cards and Payment Services are expected to decrease, and vice versa. Specifically, if Nifty rises by one unit, SBI Cards and Payment Services will decline by 0.026 units. The figure in the bracket represents the T-stat for beta.
The p-value for this coefficient is 0.76, which is greater than the 0.05 threshold, meaning the beta is statistically not significant at the 5% level.
The F-statistic is 0.089, and the p-value is 0.76, further indicating that the overall model is statistically insignificant.
Conclusion: As beta is -0.26 meaning the value is less than 1, hence invest for long term.