Title: Relation of RBL Bank with Nifty50
Author Name: Revati Gujar, RollNo-20,Div-A,KBS
Introduction:
RBL Bank, formerly known as Ratnakar Bank Limited, is one of India’s leading private sector banks. Founded in 1943, it offers a wide range of banking services, including retail banking, corporate banking, financial markets, and agri-business banking. With a strong presence across urban and rural areas, RBL Bank has expanded rapidly, focusing on innovation and customer-centric services. It is known for its digital banking solutions and strategic partnerships to enhance financial inclusion.
Objective:
To determine the Beta of RBL Bank and evaluate its significance in relation to the Nifty50 index.
Data Collection:
RBL Bank and Nifty50 data were collected for the period from 1-1-24 to 31-12-24. The data was processed to extract the Friday closing prices of Nifty50 (X) and RBL Bank (Y). A linear regression was performed using RBL Bank as the dependent variable and Nifty50 as the independent variable.
Data Analysis:
Regression Equation: RBL Bank = 2.356 + 1.203 Nifty50
Interpretation:
The regression equation indicates a positive relationship between Nifty50 and RBL Bank’s share price. The slope coefficient of 1.203 suggests that for every unit increase in Nifty50, RBL Bank’s share price is expected to increase by 1.203 units.
With an R² value of 0.15, around 15% of the variation in RBL Bank’s share price can be explained by changes in Nifty50.
Number of observation is 46.
The f-value is 7.77.
The p-value of 0.040 is statistically significant at the 5% level, indicating a reliable relationship between the two variables.
Conclusion:
RBL Bank’s beta of 1.203 suggests that it is slightly more volatile than the market. While it may experience larger price swings, it can offer higher returns for investors willing to accept some additional risk. The significant relationship with Nifty50 makes RBL Bank’s stock a potentially favorable choice for market-linked investment strategies.
Reference:
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.
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.