RESEARCH METHODOLOGY
Relationship of Nifty 50 with NTPC India Ltd
Author
Nitin Raj
MBA (Operations and Supply Chain Management)
ITM Skills University
INTRODUCTION
NTPC India Limited is India’s largest power generation company and a leading public sector enterprise in the energy sector. Established in 1975, the company is primarily engaged in the generation and sale of electricity, with a diversified portfolio including thermal, hydro, solar, and wind power. NTPC plays a crucial role in meeting India’s energy requirements while supporting the transition towards renewable and sustainable energy. Its focus on operational excellence, reliability, and environmental responsibility has strengthened its position in the Indian power industry.
OBJECTIVES OF THIS STUDY
To calculate the beta of NTPC Limited and observe its significance.
LITERATURE REVIEW
Khan, M. Y. (2017). Previous studies show that NTPC’s equity price is influenced by overall market movements and internal financial factors. Stock indices like the Nifty 50 play a significant role in explaining stock price behavior, though firm-specific factors remain dominant. This study examines the relationship between Nifty 50 and NTPC’s equity price using regression analysis.
DATA COLLECTION
The historical data of NTPC India Limited and the Nifty 50 index data were downloaded from the website for the period 1/12/24 to 30/11/25. The data was manipulated to get Friday closing prices.
DATA ANALYSIS
The intercept = a = 0.40359808
Coefficient = bx = 0.883173869
a + bx = 0.40359808 + 0.883173869
The above equation tells us about the relationship between Nifty 50 and the equity of NTPC Limited; the negative sign means if the equity of NTPC Limited, demand will fall and vice versa. If the equity rises by 1 unit, the Nifty 50 will fall by 0.000170047 units.
The t-stat for beta is 4.093135365, the p-value of which is 0.00017, which is more than 0.05. Rather, beta is not statistically significant at the 1% level, so you cannot say that NTPC’s Limited reliably goes up when Nifty goes up, based on this data. R-squared is 0.26697616 = 0.26, which means 2% of the NTPCs are explained by the Nifty 50, and 97% are due to other reasons. – the equation is
NTPC’s limited price = 0.4036 + 0.8832 × Nifty 50 level.
– Even if Nifty changes by 1000 points, which is very small. F is 16.75376, and the p-value is 0.00017; the overall model is not statistically significant.
Number of observations = 48
R square = 0.26697616
F-value = 16.75376
CONCLUSION
There exists a positive and statistically significant relationship between the Nifty 50 index and NTPC’s Limited equity price, indicating that movements in the broader market are reflected in NTPC’s stock performance. The positive regression coefficient shows that an increase in the Nifty 50 leads to a corresponding increase in NTPC’s Limited price. The very low p-value at the 1% significance level confirms that this relationship is not due to random chance, making the model statistically reliable.
However, the R-square value of 26.7% suggests that while the Nifty 50 has a meaningful influence, a large proportion of NTPC’s price movements are driven by firm-specific factors such as company fundamentals, government policies, power sector dynamics, fuel costs, and macroeconomic conditions. Therefore, although the Nifty 50 is an important determinant, it does not fully explain NTPC’s price behavior, and investors should consider additional factors for accurate decision-making.
REFERENCE
Khan, M. Y. (2017). Financial performance evaluation of NTPC Limited: A ratio and regression analysis. International Journal of Commerce and Management Research, 3(2), 45–50.
Maji, S. G., & Sur, D. (2014). Value creation of NTPC Ltd.: A post-liberalization analysis. International Journal of Accounting and Financial Management Research, 4(2), 15–24.