1. INTRODUCTION
REC Limited is an Indian “Maharatna” Central Public Sector Undertaking (CPSE) and a leading Non-Banking Financial Company (NBFC) under the Ministry of Power.It is a key arm of the Government of India, founded in 1969, initially established to energize agricultural pump-sets for irrigation and now serving as a backbone for the nation’s entire power infrastructure.With a massive loan book of over ₹5 Lakh Crore and a nationwide network of 22 state offices, REC provides financial assistance across the complete power sector value chain, including generation, transmission, distribution, and renewable energy, while recently diversifying into non-power infrastructure and logistics sectors.It is a pioneer in responsible financing, having been awarded the “Sustainability Icons Award 2025” for excellence in ESG initiatives, and is actively leading the charge in India’s energy transition through significant investments in green energy projects and Green Bond issuances.
2. OBJECTIVE
To calculate β of REC Limited and observe its significance.
3. DATA COLLECTION
Historical data of REC Limited and NIFTY50 index data (downloaded from NSE website for the period 01-Dec-24 to 30-Nov-2025). The data was manipulated to get Friday closing prices.
4. LITERATURE REVIEW
Existing literature extensively explores the dynamic interrelationship between the Nifty-50 benchmark and sectoral indices to understand market volatility and performance trends. Gupta (2024) emphasizes that sectoral indices often exhibit distinct volatility patterns compared to the broader market, with specific sectors driving overall market sentiment. Studies by Joshi (2023) and Sharma (2021) further highlight that external economic shocks and investor sentiment significantly influence these correlations, necessitating robust statistical testing like the Augmented Dickey-Fuller test to ensure data stationarity for accurate modelling.
Complementing this, recent research focuses on the risk-return profiles of individual equities against these benchmarks. Joshi and Rohitraj (2024) and Patil and Saware (2024) demonstrate the utility of Beta and Standard Deviation in benchmarking stocks against the Nifty-50, revealing that high-beta stocks often offer superior returns but come with increased volatility. This framework of comparing individual stock metrics—such as covariance and correlation regression—against market indices is established as a critical method for investors to identify defensive versus aggressive investment opportunities and optimize portfolio allocation.
5. DATA ANALYSIS
• Regression Equation:
y = 0.0106x – 0.6199
• where:
y = Weekly Return for the stock (REC Limited)
x = Weekly Return for NIFTY
This equation suggests a very weak positive relationship; if the weekly returns of NIFTY increase, the weekly return for the stock increases marginally.
• Number of Observations = 48
• t-stat for β = 0.060651179
• p-value = 0.951899763 This indicates that since p-value > 0.05, $beta$ is not statistically significant at the 5% level (or even 1% level). There is no strong statistical evidence that NIFTY’s returns predict this stock’s returns in this dataset.
• R^2 = 0.00007996 This indicates that effectively 0% (approx. 0.008%) of the weekly return for the stock is explained by the weekly return for NIFTY. 99.99% is the error due to other variables which are not in the model.
• F = 0.003678565 The Significance F is 0.951899763. Since this is > 0.05, the overall model is not statistically significant.
6. CONCLUSION
Here β = 0.0105 Since β < 1, it is good for long term investment if NIFTY rises.
7. REFERENCES
Gupta, P. K. (2024). Analysing the dynamic interrelationship between Nifty-Fifty and sectoral indices daily returns of the National Stock Exchange. International Research Journal of Modernization in Engineering Technology and Science, 6(9).
Joshi, A., & Rohitraj, S. (2024). Risk-return analysis of selected energy stocks with Nifty Energy and Nifty 50. Twenty Second AIMS International Conference on Management, 1843–1847.
Joshi, N. A. (2023). Impact of Covid-19 on performance on Indian stock indices: A study for NSE composite and sectoral indices. Copernican Journal of Finance & Accounting, 11(4), 125–146.
Patil, V., & Saware, P. (2024). Analysing the relationship between risk and return in the equity stocks of ten selected companies over five years: An in-depth study. International Journal for Multidisciplinary Research.
Sharma, P. C. (2021). Impact of investors’ sentiments on selected sectoral indices return volatility: Special reference to NSE. Orissa Journal of Commerce, 42(1), 44–58.