Relationship of Nifty 50 with SAIL (Steel Authority of India Limited)
Author -Sanskriti Sanap
MBA -Finance
ITM Skills University
INTRODUCTION
Steel Authority of India Limited (SAIL) is a premier government-owned steel manufacturing corporation and a Maharatna central public sector enterprise. Headquartered in New Delhi, it operates as a fully integrated iron and steel maker with five major integrated plants and three special steel facilities across India. As of the 2024–25 fiscal year, SAIL achieved a record production of 19.17 million tonnes of crude steel and reported a turnover of approximately ₹1,02,478 crore. The company remains a critical contributor to India’s infrastructure and defense sectors, supplying specialized steel for landmark projects like indigenous aircraft carriers and high-speed rail corridors. Dedicated to national self-reliance, it is currently undergoing massive modernization to significantly expand its production capacity for future demand.
OBJECTIVE OF THIS STUDY
Calculation of beta of SAIL (Steel Authority of India Limited) and observe it’s significance.
LITERATURE REVIEW
1.CSR Strategy-
Pattnaik & Shukla (2018) find that SAIL transitioned from basic philanthropy to a strategic “Maharatna” framework, using CSR to maintain its social license and develop regional infrastructure.
2.Reform Impact-
Baa & Chattoraj (2023) show that government reforms and “Maharatna” status improved SAIL’s financial autonomy and efficiency, though it still lags behind private competitors in technological innovation.
DATA COLLECTION
The Historical data of SAIL and Nifty 50 was downloaded from NSE india.com Friday closing prices were found and weekly return what calculated. Weekly return of nifty was taken as X and weekly return of SAIL what’s taken as Y.Y was regress on X.
DATA ANALYSIS
The intercept = a =−0.083998233
Coefficient = bx=0.098868515
a+bx=−0.083998233+0.098868515
The above equation tells us the relationship between Nifty 50 and Steel Authority of India Limited (SAIL) . The positive sign means if the equity of Steel Authority of India Limited (SAIL) rises and vice versa, the Nifty 50 tends to rise as well, and vice versa. If the equity rises by 1 unit, the Nifty 50 will rise by 0.098868515 units twice versa.
t-stat for beta is 2.692061285, the p-value of which is 0.009689883. This p-value is less than 0.05, and even less than 0.01, meaning the beta is statistically significant at both the 5% and 1% levels. Based on this data, you can say that Steel Authority of India Limited (SAIL) reliably has a positive relationship with the Nifty 50 movements. R-square is 0.128845431≈0.13, which means 13% of the Nifty 50 movements are explained by Steel Authority of India Limited (SAIL), while 87% is due to other reasons.
The estimated regression equation is expressed as:
y=−0.083998233+0.098868515x
Summary Statistics:
No of observations: 51
R square: 0.128845431
F – value: 7.24719396
CONCLUSION
β = 2.69
Since β is more than 1, Steel Authority of India Limited (SAIL) is more volatile than the market (Nifty 50), indicating that the stock carries higher systematic risk and has the potential to generate higher returns compared to the market. This makes Steel Authority of India Limited (SAIL)suitable for short-term investors who are willing to take higher risk, while long-term investors should carefully consider market and firm-specific factors before investing.
REFERENCE
1.Pattnaik, P. N., & Shukla, M. K. (2018). The evolution of CSR efforts at Steel Authority of India Limited. Global Business and Organizational Excellence, 37(3), 25–32.
2. Baa, R., & Chattoraj, A. K. (2023). Assessing the Effectiveness of Public Sector Enterprises Reforms on Growth and Performances of Steel Authority of India Ltd. International Journal of Professional Business Review, 8(8), e03367.