Title: Relationship Of Nifty 50 with Steel Authority of India LTD
Author: Sneha Patel
Introduction:
Steel Authority of India Limited (SAIL) is one of the largest state-owned steel producers in India and a prestigious Maharatna Central Public Sector Enterprise. Established in its current form in 1973 (tracing its roots back to Hindustan Steel Limited founded in 1954), SAIL is under the administrative control of the Ministry of Steel, Government of India.
Headquartered in New Delhi, the company operates five integrated steel plants at Bhilai, Rourkela, Durgapur, Bokaro, and Burnpur, along with three special steel plants and a ferroalloy plant. SAIL is a critical player in India’s infrastructure and industrial growth, supplying high-quality steel for railways, defense, space programs, and large-scale construction projects. It produces a wide range of products, including hot and cold rolled sheets, coils, bars, rods, structural steel, and railway wheels/axles.
Objective:
To Calculate the beta of Steel Authority of India LTD and observe its significance in realtion to Nifty 50
Literature Review:
View 1: Dr.Pramod Kumar Patjoshi (2020) Comparative Risk and Return Analysis of Bombay Stock Exchanges and Steel Sector in India
In the contemporary economic expansion interest rates are failing and fluctuation in the stock market has forced the investors to think before investment in financial securities. Hence it found difficulties to take investment decision for framing an efficient portfolio. This is mainly, as investments in stock market are risky in nature and investors have to expect various issues before investing. These issues include risk, return, volatility of financial securities and liquidity. Therefore the primary objective of this research is risk and returns analysis of Sensex and different steel sectors of Bombay Stock Exchange. The risk and return have analyzed by considering the daily closing value of Sensex and all the sample companies. The study is centered on secondary data. The data for the study has been composed from the BSE website over a period of 10 years from January 4, 2010 to December 31, 2019. For achieving the above objective in addition to test the hypothesis, various methods like correlation, descriptive statistics and t test have been employed.
View 2: Dr. Mordhawaj Tripathi (2003) A Study of Working Capital Management Position of Steel Authority of India Limited
India’s economic growth is strongly related to the development of its steel sector, which accounts for roughly 2% of the country’s GDP. As of 2011, India’s GDP growth rate was 7.2%, with steel consumption serving as an important indication of economic improvement. India is a global leader in the steel sector, with steel production increasing at a compounded annual growth rate (CAGR) of 8% between 2002-03 and 2006-07. Despite this expansion, the sector’s financial performance has not been completely satisfying. This study investigates the working capital management of Steel Authority of India Limited (SAIL), one of India’s largest steel producers. The study is primarily based on secondary data and spans three years (2020-2022). The studies demonstrate a close link between SAIL’s company profitability and the working capital management component.
Data Collection:
The data of Nifty 50 and the data for Steel Authority of India LTD 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 Steel Authority of India LTD. 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 Steel Authority of India LTD was taken as Y. Y was regressed on X.
Data Analysis:
SAIL Price = 168.7447 – 0.00602(NIFTY 50)
The above regression equation explains the relationship between the dependent variable (SAIL stock price) and the independent variable (NIFTY 50 index values) using 49 observations.
The coefficient of X Variable 1 is negative (-0.00602), indicating a negative relationship between the index and the stock price during this specific period. This implies that a one-unit increase in the NIFTY 50 leads to an average decrease of approximately 0.00602 units in the SAIL stock price. While the magnitude of change per unit is small, the statistical evidence suggests that this relationship is significant and consistent within the dataset analyzed.
The t-statistic for the coefficient is -4.4266 with a p-value of 0.000056, which is well below both the 1% and 5% levels of significance. This confirms that the coefficient is statistically significant, indicating that movements in the NIFTY 50 index have a meaningful and reliable influence on the stock price of SAIL within the scope of this model.
The R-square value of 0.2942 shows that approximately 29.42% of the variation in the SAIL stock price is explained by changes in the NIFTY 50 index, reflecting a moderate explanatory power for a single-variable regression. The F-statistic of 19.59 with a significance value of 0.000056 indicates that the overall regression model is statistically significant, confirming the presence of a valid linear relationship between the variables.
Conclusion:
The study concludes that there is a statistically significant relationship between the NIFTY 50 and SAIL for the period under review. With an $R^2$ of nearly 30%, the broader market serves as a moderate predictor of SAIL’s price movement. However, the majority of SAIL’s price volatility is likely driven by non-market factors, such as international commodity cycles, raw material costs (coking coal and iron ore), and government policies regarding infrastructure and disinvestment. Investors should consider SAIL as a stock that reacts to the market but is heavily influenced by its own industry-specific dynamics.
References:
- : Dr.Pramod Kumar Patjoshi (2020) Comparative Risk and Return Analysis of Bombay Stock Exchanges and Steel Sector in India.Volume- I – 2020
- Dr. Mordhawaj Tripathi (2003) A Study of Working Capital Management Position of Steel Authority of India Limited.Vol. 2, 2003