Relationship between NIFTY 50 and Axis Bank Returns
Author: Aryan Saini
Introduction
Axis Bank Ltd. is one of India’s leading private sector banks, established in 1993 and originally known as UTI Bank. It is headquartered in Mumbai and offers a wide range of financial services including retail banking, corporate banking, MSME, and international banking. The bank has a strong focus on digital innovation and technology-driven solutions to improve customer experience. Axis Bank has an extensive presence across India with thousands of branches and ATMs, along with operations in several international markets. It plays a significant role in supporting India’s financial system and economic growth.
Objective of the Study
The main objective of this study is to calculate the beta of Axis Bank and observe its significance.
Literature Review
View 1 : Upadhyay (2024) analyzed the relationship between Axis Bank and NIFTY 50 using weekly returns and found a negative and weak beta value, indicating an inverse relationship with the market. The study concluded that the relationship was statistically insignificant, with most variations in Axis Bank returns explained by firm-specific and macroeconomic factors rather than market movements.
View 2: Dhale (2024) examined the relationship between Axis Bank Ltd. and NIFTY 50 using weekly returns and found a positive but weak relationship, with a beta value less than one. The study concluded that although Axis Bank is less volatile than the market, the relationship was not statistically significant, indicating limited market influence on its weekly returns.
Data Collection
Historical daily closing price data of Axis Bank and NIFTY 50 were collected from the official website of NSE India. The data was converted into weekly data by selecting Friday closing prices. Weekly returns were then calculated for further analysis. Weekly returns of Axis Bank were taken as the dependent variable (Y). Weekly returns of NIFTY 50 were taken as the independent variable (X). Then Regression analysis was performed .
Data Analysis
The estimated regression equation is:
Axis Bank Returns = 0.0421 + 1.1517 (NIFTY 50 Returns)
N=48 R2=0.5122 F=48.30 P value= 0.000000108
The above equation show relationship between Nifty 50 and Axis Bank Ltd.
· The coefficient of NIFTY 50 returns is positive (1.1517), which indicates a direct relationship between the market and Axis Bank returns. This means that when NIFTY 50 returns increase by 1 unit, Axis Bank returns increase by approximately 1.15 units, and vice versa.
· The p-value of the NIFTY 50 coefficient is 1.08 × 10⁻⁸, which is less than 0.01, indicating that the relationship is statistically significant at the 1% level. Hence, NIFTY 50 returns have a significant impact on Axis Bank returns.
· The R² value is 0.5122, which means that around 51.22% of the variation in Axis Bank returns is explained by movements in NIFTY 50 returns. This shows a reasonably strong explanatory power of the model.
· The F-statistic is 48.30 with a Significance F value of 1.08 × 10⁻⁸, which is also less than 0.01. This confirms that the overall regression model is statistically significant at the 1% level. The intercept coefficient (0.0421) has a p-value of 0.8925, which is greater than 0.05, indicating that the intercept is not statistically significant.
The analysis is based on 48 observations, and the results suggest that Axis Bank returns are strongly influenced by overall market movements represented by the NIFTY 50 index.
Conclusion
β = 1.1517
Since β > 1, Axis Bank is more volatile than the market (NIFTY 50), meaning it carries higher risk and higher return potential compared to the market. It is good for investing in this company for short term.
References
· NSE India. (2024). Historical market data. https://www.nseindia.com Bodie, Z., Kane, A., & Marcus, A. J. (2018). Investments (11th ed.). McGraw-Hill Education.
· Anushka Dhale. (2024). Relationship of Axis Bank LTD with NIFTY50. Retrieved December 20, 2025, from http://www.sachdevajk.in/?p=20683