Title: Relationship of Nifty50 with NESCO Limited
Author: Nishtha Maheshwari
Introduction:
The Indian equity market is primarily represented by the NIFTY 50, a benchmark index comprising 50 of the largest and most liquid Indian companies listed on the National Stock Exchange (NSE). The NIFTY 50 serves as a barometer for the Indian economy, reflecting systematic risks and broad market trends. In contrast, NESCO Limited (formerly New Standard Engineering Co. Ltd.) is a unique, diversified entity with a strong presence in IT Parks, Exhibition Centres (MICE industry), and Engineering. Unlike high-beta stocks that fluctuate wildly with the market, NESCO is known for its debt-free balance sheet and steady rental-based revenue streams.
Objective:
Calculation of beta of NESCO Limited and observe its significance.
Literature Review:
View 1: Success in Generating and Distributing Electricity Power Throughout Bangladesh: An Overview of NESCO (Northern Electricity Supply Company) Nymatul Jannat Nipa, Deb Kumar Sarkar Rajib (2020) –
Nipa and Rajib (2020) and the Bangladesh Power Development Board (BPDB) highlight that Bangladesh’s power sector has undergone a massive transformation, with capacity addition rising significantly from 2012 to 2018. The literature emphasizes that the energy crisis was initially mitigated through “Fast Rental Power Plants,” which, despite being expensive due to fuel costs, bridged the gap between demand and supply.
View 2: Costing for strategy development and analysis in an emerging industry: The Newcastle Upon Tyne Electric Supply Company (2017) –
This article examines the provision of strategic costing information in the context of the emergence and growth of the British electrical power industry and its pre-eminent. A detailed case study of NESCO’s costing for strategy development and analysis is presented. This research finds that NESCO’s adoption of systematic, formal considerations of strategy and its use of costing for strategy development and analysis were related to a combination of three factors: first, the novelty and complexity of the electricity supply industry; second, the regulated environment of the electricity supply industry; and third, the ability and drive of key individuals. The implications of this research for contemporary studies of strategic management accounting are considered.
Data Collection:
The data of Nifty 50 and the data for NESCO Limited was downloaded from 01-12-2024 to 30-11-2025 form NSE India.com. This data is used for finding out the Friday closing prices for Nifty 50 and NESCO. Weekly return was calculated by the formula (Yt+1-Yt)/Yt*100 and then weekly returns of the Nifty 50 was taken as X and the equity of NESCO Limited was taken as Y. Y was regressed on X.
Data Analysis:
The regression equation derived from the data is:
NESCO Limited Returns=-40.4271 – 0.5144 NIFTY 50 Returns
The above regression equation explains the relationship between the dependent variable and the independent variable (X Variable 1) using 49 observations.
- The coefficient of X Variable 1 is negative (-0.5144), indicating a negative and extremely weak relationship between the variable and the dependent outcome. This implies that a one-unit increase in X Variable 1 leads to an average decrease of approximately 0.5144 units in the output, though the statistical evidence suggests this relationship is not reliable.
- The t-statistic for the coefficient is -0.0366 with a p-value of 0.9710, which is far above the 1% and 5% levels of significance. This confirms that the coefficient is not statistically significant, indicating that movements in X Variable 1 do not have a meaningful or strong influence on the returns.
- The R-square value of 0.00003 (rounded from 2.978E-05) shows that approximately 0.003% of the variation in the returns is explained by changes in X Variable 1, reflecting a negligible explanatory power of the regression model. The F-statistic of 0.0013 with a significance value of 0.9710 indicates that the overall regression model is not statistically significant, confirming the absence of a strong linear relationship between the variables.
Conclusion:
- The regression analysis indicates a very weak and statistically insignificant relationship between the dependent variable and X Variable 1. The estimated beta coefficient (beta = -0.5144) is negative but not statistically significant (P-value = 0.9710), suggesting that we cannot confirm the dependent variable moves in any predictable direction relative to the independent variable. The beta value reflects negligible sensitivity, implying the movements are largely independent of the tested factor.
- With an R² value of 0.00003, a negligible proportion (0.003%) of the variation in the returns is explained by movements in X Variable 1, indicating almost no dependence and that the results are driven almost entirely by other factors or random noise. The insignificant F-statistic (Significance F = 0.9710) confirms the weakness of the regression model. Overall, the variable does not behave as a market-aligned security, meaning its performance is likely uncorrelated with the independent variable.
References:
- Success in Generating and Distributing Electricity Power Throughout Bangladesh: An Overview of NESCO (Northern Electricity Supply Company) Nymatul Jannat Nipa, Deb Kumar Sarkar Rajib (2020)
- McLean, T., & McGovern, T. (2017): Costing for strategy development and analysis in an emerging industry: The Newcastle Upon Tyne Electric Supply Company, 1889–1914. The British Accounting Review, 49(3), 294-315.