Title:
Relationship of NIFTY 50 with Adani Green Energy Limited
Author:
Yash Parab
Introduction:
This research examines the relationship between the stock returns of Adani Green Energy Limited and the benchmark index NIFTY 50, with a focus on estimating and interpreting systematic risk through beta analysis. The study evaluates how closely the returns of Adani Green Energy Limited move in relation to overall market movements and whether the company exhibits market sensitivity or firm-specific behaviour. By applying a regression-based Capital Asset Pricing Model (CAPM) framework, the research assesses the strength, direction, and statistical significance of the relationship between the company’s equity returns and NIFTY 50 returns. The analysis provides insights into the risk–return characteristics of Adani Green Energy Limited and its suitability as an investment option compared to broader market movements.
Objectives:
• To calculate the beta of Adani Green Energy Limited
• To analyse the significance of beta in relation to NIFTY 50
Literature Review:
View 1: V. L. Govindarajan, U. Parthiban, V. Balu (2020)
Financial Performance of Nifty 50 Automobile Companies in India – An Empirical Comparative Analysis
The study is based on secondary data collected from annual reports and financial websites such as Moneycontrol and BSE for a ten-year period from 2009–10 to 2018–19. The research analyses financial performance using Edward Altman’s Z-score and DuPont analysis, focusing on Internal Growth Rate (IGR) and Sustainable Growth Rate (SGR). The findings indicate that profitability and efficiency ratios play a crucial role in determining financial stability and growth, highlighting the importance of firm-specific factors beyond market movements.
View 2: Mr. Pushkar Dilip Parulekar (2015)
DuPont Analysis for Selected Five NIFTY Fifty Companies
This study explains how Return on Equity (ROE) can be decomposed into operating efficiency, asset utilization, and financial leverage using the DuPont framework. The research applies multiple regression analysis and ANOVA to examine performance across selected NIFTY 50 companies, including Mahindra and Mahindra Limited. The findings emphasize that company-specific operational efficiency and capital structure significantly influence shareholder returns, often more than overall market performance.
Data Collection:
The data for NIFTY 50 and Adani Green Energy Limited was collected from the official website of NSE India for the period 01-12-2024 to 30-11-2025. Friday closing prices were used to compute weekly returns.
Weekly returns were calculated using the formula:
Weekly Return = (Current Week Price − Previous Week Price) / Previous Week Price × 100
The weekly returns of NIFTY 50 were taken as the independent variable (X), and the weekly returns of Adani Green Energy Limited were taken as the dependent variable (Y). A regression analysis was carried out by regressing Y on X.
Data Analysis:
Adani Green Energy Limited Returns = 4.01 + 1.08 (NIFTY 50)
The above regression equation explains the relationship between the dependent variable (returns of Adani Green Energy Limited) and the independent variable (NIFTY 50 returns) using 46 weekly observations.
The coefficient of the independent variable (NIFTY 50) is 1.08, indicating a positive relationship between market returns and the returns of Adani Green Energy Limited. However, the relationship is statistically insignificant, suggesting that changes in NIFTY 50 returns do not have a meaningful impact on the company’s equity returns during the study period.
The p-value of 0.526 for the NIFTY 50 coefficient is higher than the 5% and 1% significance levels, indicating that the relationship is statistically insignificant. Hence, the null hypothesis cannot be rejected.
The R² value of 0.096 indicates that approximately 9.6% of the variation in Adani Green Energy Limited’s returns is explained by movements in the NIFTY 50. The remaining 90.4% of the variation is attributed to firm-specific factors such as renewable energy project performance, regulatory policies, capital structure, and sectoral dynamics.
Further, the F-statistic of 0.41 with a Significance F of 0.526 confirms that the overall regression model is statistically insignificant. This indicates that NIFTY 50 returns fail to significantly explain the movements in Adani Green Energy Limited’s equity returns during the observed period.
Conclusion:
The regression analysis reveals no statistically significant relationship between the returns of Adani Green Energy Limited and the NIFTY 50 index. Although the estimated beta coefficient is positive, it is statistically insignificant, indicating that the company’s stock returns do not meaningfully respond to overall market movements during the study period. This suggests that Adani Green Energy Limited does not closely track fluctuations in the broader market.
The relatively low R² value further indicates that market movements explain only a limited portion of the variability in the company’s returns, emphasizing the dominance of firm-specific and sector-related factors, particularly those associated with the renewable energy industry. Overall, Adani Green Energy Limited exhibits distinctive risk characteristics, making it potentially suitable for investors seeking portfolio diversification rather than direct exposure to general market movements represented by the NIFTY 50.
References:
Govindarajan, V. L., Parthiban, U., & Balu, V. (2020). Financial Performance of Nifty 50 Automobile Companies in India – An Empirical Comparative Analysis, Volume I.
Parulekar, P. D. (2015). DuPont Analysis for Selected Five NIFTY Fifty Companies, Vol. 2.