Relation of Vaibhav Global Limited with Nifty50
Author: Vaibhav Vinchu
Introduction:
Vaibhav Global Limited (VGL) is a multinational electronic retailer and manufacturer of fashion jewelry and lifestyle products. Headquartered in India, VGL operates home shopping networks in the U.S. (Shop LC) and the U.K. (TJC). The company has a vertically integrated business model, handling manufacturing, sourcing, and direct sales to customers through television and e-commerce. With a strong global footprint, VGL continues to innovate in retail and supply chain efficiencies, making it a key player in the affordable luxury segment.
Objective:
To determine the Beta of Vaibhav Global Limited and analyze its significance in relation to Nifty50.
Literature Review:
Gourdon, Daniel et al (2023) present refined methodologies for evaluating shipbuilding capacity. It highlights the limitations of traditional yard-by-yard production assessments and proposes using average production figures to smooth out fluctuations. The study also emphasizes firm-level indicators, such as productivity metrics, to provide a more accurate capacity estimation. Additionally, it examines how mergers and acquisitions impact capacity, underscoring the need for dynamic assessment models. By integrating these methodologies, the report offers a more comprehensive approach to understanding shipbuilding capacity, aiding policymakers and industry stakeholders in addressing excess capacity issues.
David (2017) investigates the relationship between shipbuilding capacity and economic growth across various countries. Utilizing panel data from 1990 to 2015, the authors employ econometric models to assess how fluctuations in shipbuilding capacity influence GDP growth rates. The findings suggest a positive correlation between enhanced shipbuilding capacity and economic growth, particularly in developing nations where maritime industries play a pivotal role in trade and employment. The study contributes to existing literature by highlighting the significance of industrial capacity in fostering economic development and underscores the need for policies that support the expansion of critical industries like shipbuilding.
Data Collection:
Vaibhav Global Limited and Nifty50 data was downloaded for the period 1-1-24 to 31-12-24. The data was manipulated to find out the Friday closing prices of Nifty50 = X and Vaibhav Global Limited = Y. Y was regressed on X.
Data Analysis:
Equation: Vaibhav Global Limited = 0.0024 + 0.0688 Nifty50
Interpretation:
The regression equation describes the relationship between Nifty50 (X) and Vaibhav Global Limited share price (Y), indicating that Vaibhav Global’s share price is the dependent variable, while Nifty50 is the independent variable. The positive coefficient of 0.0688 suggests that for every unit increase in Nifty50, the Vaibhav Global share price is expected to increase by 0.0688 units. With 46 observations (N = 46), the R² value is 0.0588, implying that approximately 5.88% of the variation in Vaibhav Global’s share price can be explained by changes in Nifty50. The F-value for the model is 2.75, and the p-value for the slope is 0.1043, which is greater than the conventional threshold of 0.05. This indicates that the relationship between Nifty50 and Vaibhav Global’s share price is not statistically significant at the 5% level. Consequently, this model does not provide strong evidence of a linear relationship between Nifty50 and Vaibhav Global’s share price.
Conclusion:
Vaibhav Global Limited’s beta of 0.0688 indicates that it has low correlation with market movements and is less volatile compared to Nifty50. This suggests that Vaibhav Global Limited is a low-risk stock with minimal dependency on broader market trends, making it more suitable for long-term investors rather than short-term market speculators.
Reference:
Karin Gourdon & Laurent Daniel & Takuya Adachi & Emilie Berger, 2023. ‘New approaches to shipbuilding capacity assessments,’ OECD Science, Technology and Industry Policy Papers 140, OECD Publishing.
David Perry, 2017. ‘2016 Status Report on Major Equipment Procurement,’ SPP Research Papers, The School of Public Policy, University of Calgary, vol. 10(22), September.