Title : : Relationship of Nifty50 with Petronet LNG
Author: Purvita Sanjay Bambarkar
Introduction:
Petronet LNG Limited is one of India’s key companies supporting the country’s shift toward cleaner energy. It was set up in 1998 by major public sector companies such as GAIL, ONGC, Indian Oil, and BPCL to ensure a steady supply of natural gas to India. The company focuses on importing and processing liquefied natural gas (LNG) to meet rising energy needs. Through its LNG terminals at Dahej and Kochi, Petronet plays an important role in strengthening India’s energy security and reducing dependence on traditional fuels.
Objective:
Calculation of beta of ONGC and observe its significance
Literature Review:
View 1 : Esha Jain , Namita Gupta , Sandeep Kumar Gupta , Hanna Davydenko (2019)
Oil drilling and exploration support economic growth but also create environmental challenges such as deforestation and pollution. This study analyses the top five Indian oil drilling and exploration companies using Wilder’s Relative Strength Index (RSI) and finds that despite environmental concerns, these firms show balanced and stable stock performance.
View 2: Kapil Shobhwani , Jai Prakash (2025)
The study examines the nature and extent of ESG disclosure among Indian companies in the Nifty-200 index and finds a clear and consistent improvement in ESG reporting from 2019–20 to 2023–24. Environmental disclosures show the strongest progress, while social and governance areas are also steadily improving, with leading performance by Reliance Industries Ltd. and Infosys Ltd. and emerging strength from companies in the chemicals and pharmaceutical sectors.
Data Collection:
The data of Nifty 50 and the data for Petronet LNG 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 Petronet LNG . 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 Petronet LNG was taken as Y. Y was regressed on X.
Data Analysis:
PETRONET Returns = 338.3961 − 0.00577
· The above regression equation explains the relationship between the dependent variable (Petronet stock returns) and the independent variable (market index / X Variable 1) using 48 weekly observations.
· The coefficient of X Variable 1 is negative (−0.00577), indicating a negative but very weak relationship between the market index and Petronet returns. This implies that a one-unit increase in X Variable 1 leads to an average decrease of approximately 0.00577 units in Petronet returns, though the impact is very small.
· The t-statistic for the coefficient is −1.96 with a p-value of 0.0559, which is slightly above the 5% level of significance. This confirms that the coefficient is not statistically significant at the 5% level, indicating that movements in X Variable 1 do not have a strong or reliable influence on Petronet returns.
· The R-square value of 0.0771 shows that approximately 7.71% of the variation in Petronet returns is explained by changes in X Variable 1, reflecting low explanatory power of the regression model. The F-statistic of 3.8453 with a significance value of 0.0559 indicates that the overall regression model is not statistically significant at the 5% level, confirming the weak linear relationship between the variables.
Conclusion:
The regression analysis indicates a weak and statistically insignificant relationship between Petronet stock returns and the market index (X Variable 1). The estimated beta coefficient (β = −0.00577) is negative but not statistically significant (P-value = 0.0559), suggesting that we cannot confidently conclude that Petronet returns move in line with the overall market.
With an R² value of 0.0771, only 7.71% of the variation in Petronet’s returns is explained by market movements, indicating low market dependence and suggesting that returns are largely driven by company-specific factors. The insignificant F-statistic (Significance F = 0.0559) further confirms the weakness of the regression model. Overall, Petronet does not behave as a strongly market-aligned stock, implying limited exposure to systematic market risk.
References:
· Esha Jain , Namita Gupta , Sandeep Kumar Gupta , Hanna Davydenko (2019).: Stock Analysis of Oil Drilling and Exploration Companies Impacting India’s Economic Volume-8, Issue-6C2, April 2019.
Daniel Casado Ginard.(2024). Nature and Extent of ESG Disclosure in India: A Study of Selected Nifty-200 Companies Vol. 2 No. 2 (2025): Commerce Research Review