Title: Relationship of Steel Authority of India Limited-SAIL with Nifty 50
Author: Sanskriti Malviya
Introduction: It is an Indian public sector steel manufacturing corporation based in New Delhi. It is the largest government owned steel producer, with an annual production of 18.29 million metric tons. Incorporated on 24 January 1973, SAIL has 54,431 employees and is under the administrative control of the Ministry of Steel.
Objective: To find out beta of SAIL and its significance.
Data collection: The data of Nifty 50 and SAIL was downloaded from NSE website, i.e., nseindia.com for the period of 1-6-23 to 31-5-24. The data was shaped to find out Friday’s closing price and its Weekly returns were calculated. Weekly return [(yt+1 – yt)/yt*100] of Nifty 50 was termed as X and of SAIL as Y. Then, Y was regressed on X.
Data analysis: Regression Equation=
Weekly return of SAIL = -0.97+2.50 weekly return of nifty
(0.78)
N= 45
R2 = 0.01
F = 0.60
P-value = 0.44
The above equation shows the relationship between Nifty 50 and Weekly return of SAIL. The positive sign before the coefficient of weekly return of nifty tells us that there is a positive relationship. If Nifty rises by 1 unit, SAIL will rise by 2.50 unit and vice versa.
Figure in bracket is t-stat for beta and p-value is 0.44, which is more than 0.05 meaning that model is not statistically significant.
R2 is 0.01, which means only 1% of weekly return of Company are explained by Nifty.
F= 0.60 and p-value for that is 0.44 meaning overall model is statistically significant.
Conclusion: As the beta of ABCL (2.50) is more than 1, it would be advisable to invest for short term.