Title: Relation of TATA Motors with Nifty50
Author: Tahera Mulla
Introduction:
Tata Motors Limited, a subsidiary of the Tata Group, is a leading Indian automobile manufacturer with a global presence in 125+ countries. Founded in 1945 and headquartered in Mumbai, it produces passenger cars, commercial vehicles, electric vehicles, and luxury cars under brands like Tata, Jaguar Land Rover (JLR), and Tata Daewoo. A pioneer in India’s electric vehicle market, Tata Motors focuses on innovation, sustainability, and advanced automotive technologies, making it a key player in the global auto industry.
Objective:
To find out the Beta of TATA Motors and it’s significance
Literature Review:
Bruche (2010) stated that the paper analyzes Tata Motors’ transformation from a commercial vehicle manufacturer to a global passenger car player. It highlights Tata’s strategic resource acquisition, internal capability building, and international expansion, including the acquisition of Jaguar Land Rover. The study emphasizes the role of Tata Group in providing financial and managerial support, accelerating Tata Motors’ catch-up process. It concludes that Tata Motors’ success was driven by a combination of internal innovation, external acquisitions, and strong business group affiliation, which enabled rapid internationalization and competitiveness in the global market.
Tyabji (2015) stated that the paper explores the evolution of frugal engineering in India, tracing its origins to the Phased Manufacturing Programme (PMP) of the 1950s. It highlights how Indian firms, particularly in the automobile sector, developed cost-effective, innovative solutions under resource constraints. By adopting lean and concurrent engineering, companies like Tata Motors improved efficiency and product development. The study concludes that frugal engineering is a strategic approach to innovation, enabling Indian firms to compete globally despite limited resources.
Data Collection:
TATA Motors and Nifty50 data was download for period 1-1-24 to 31-12-24 and data was manipulated to find out the Friday closing prices were calculated of Nifty50 = X and TATA Motors = Y, Y was regression on X
Data Analysis:
Equation: TATA Motors = -0.3064 + 1.3458 Nifty50
Interpretation: The regression equation describes the relationship between Nifty50 (X) and TATA Motors share price (Y), indicating that TATA Motors share price is the dependent variable, and Nifty50 is the independent variable. The positive coefficient of 1.3458 suggests that for every one-unit increase in Nifty50, TATA Motors share price is expected to increase by 1.3458 units. With 47 observations (N=47), the model’s R-squared value: 0.2753, implying that approximately 27.53% of the variation in TATA Motors share price can be explained by changes in Nifty50, leaving 72.47% of the variation attributable to other factors not include in the model. The p-value for the slope is 0.00015, which is lessthan the conventional threshold of 0.05, indicating that the relationship between Nifty50 and TATA Motors share price is statistically significant at the 5% level. Consequently, this model provides strong evidence to suggest a significant linear relationship between Nifty50 and TATA Motors share price.
Conclusion:
Shipping Corporation of India’s beta of 1.3458 indicates that it is more volatile than the market and may be better suited for short-term investment.
Reference:
Bruche, Gert, 2010. “Tata Motor’s transformational resource acquisition path: A case study of latecomer catch-up in a business group context,” Working Papers 55, Berlin School of Economics and Law, Institute of Management Berlin (IMB).
Tyabji, Nasir, 2015. “From the Phased Manufacturing Programme to Frugal Engineering: Some Initial Propositions,” MPRA Paper 63483, University Library of Munich, Germany.
