Title : Relationship of Nifty50 with Redington
Author: Rohan Patil
Introduction:
Redington Limited (formerly Redington India Ltd) is a leading technology solutions provider and one of the largest aggregators of Information Technology (IT) and mobility products globally. Founded in 1961 and headquartered in Chennai, India, it has evolved from a volume distributor to a value-added solutions provider. Distribution of IT hardware, networking equipment, software, and mobility devices (e.g., Apple, HP, Dell, Lenovo). It operates across 38+ markets, including India, the Middle East, Africa, Turkey, and South Asia. Redington is currently focused on high-growth areas such as Cloud services, Cybersecurity, Solar energy, and 3D printing.
Objective:
Calculation of beta of Redington and observe its significance
Literature Review:
View 1: Dr. Samrat Ray (2025) A Study on Relationship Between the Price Performance of Individual Stock and Nifty Fifty Index
This study analyzes the relationship between the NIFTY 50 index and Redington Limited to determine how closely the company’s stock performance follows broader market trends. Based on the regression analysis of historical data, the study reveals a very weak correlation between the two, with an R-Square value of approximately 0.0041, indicating that the NIFTY 50 index explains less than 1% of the variance in Redington’s stock returns. Furthermore, with a Significance F-value of 0.66, the relationship is found to be statistically insignificant, suggesting that Redington’s price movements are predominantly driven by company-specific factors, such as global supply chain dynamics and digital service expansion, rather than general market fluctuations. Consequently, Redington operates with a high degree of independence from the benchmark index, offering unique risk-return characteristics for investors.
View 2: Dr. Rajwanti Sharma (2025) A Descriptive Analysis of Relationship Between Trading Volume and Stock Returns of NIFTY 50 Companies
This research paper, published in the RESEARCH REVIEW International Journal of Multidisciplinary (September 2023), examines the relationship between trading volume and stock returns among NIFTY 50 companies using descriptive analysis and one-way ANOVA. By analyzing time-series data of closing prices and trading volumes, the study highlights a significant disparity in market valuation and liquidity across sectors; for instance, Shree Cement Ltd and Redington recorded the highest mean closing prices, while Reliance Industries and SBI led in average trading volume. A core component of the research involved testing the “lead-lag” effect using quantile regression and ANOVA to see if trading volume at “lag one” (the previous day) significantly impacts stock returns at different percentiles. While the statistical results supported the null hypothesis—finding no significant difference in average stock return response across different quantiles—the descriptive “means plot” indicated a visible upward trend, suggesting that higher trading volumes generally correspond to higher subsequent stock returns. Ultimately, the study concludes that while individual stocks exhibit unique volatility and descriptive characteristics, trading volume serves as a vital pillar for investors seeking to map the microstructure of the capital market and make rational investment decisions.
Data Collection:
The data of Nifty 50 and the data for Redington 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 Redington. 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 Redington was taken as Y. Y was regressed on X.
Data Analysis:
Redington Returns = 0.4072 − 0.3087 (NIFTY 50)
The above regression equation explains the relationship between the dependent variable (stock returns) and the independent variable (NIFTY 50 index values) using 49 weekly observations.
- The coefficient of X Variable 1 (−0.3087) is negative, indicating a negative but very weak relationship between the NIFTY 50 index and Redington stock returns. This implies that a one-unit increase in the NIFTY 50 index leads to an average decrease of approximately 0.3087 units in Redington returns; however, the relationship lacks statistical reliability.
- The t-statistic for the coefficient is −0.44 with a p-value of 0.6639, which is much higher than both the 1% and 5% levels of significance. This confirms that the coefficient is not statistically significant, suggesting that movements in the NIFTY 50 index do not have a meaningful impact on Redington’s stock returns.
- The R-square value of 0.0041 indicates that only 0.41% of the variation in Redington returns is explained by changes in the NIFTY 50 index, showing negligible explanatory power of the regression model. The F-statistic of 0.1913 with a significance value of 0.6639 further confirms that the overall regression model is not statistically significant, indicating the absence of a strong linear relationship between the variables.
Conclusion:
- Based on the regression analysis, it can be concluded that NIFTY 50 index movements do not have a significant influence on Redington’s stock returns during the study period. Although the regression coefficient indicates a weak negative relationship, the high p-value and very low R-square value show that this relationship is statistically insignificant and unreliable. The overall regression model also fails the significance test, confirming that market index fluctuations explain only a negligible portion of Redington’s return variations. Hence, Redington’s stock returns appear to be influenced more by firm-specific or other external factors rather than general market movements.
References:
· Dr. Samrat Ray.(2025). A Study on Relationship Between the Price Performance of Individual Stock and Nifty Fifty Index. Volume- 15 – 2025
- Dr. Rajwanti Sharma.(2023). A Descriptive Analysis of Relationship Between Trading Volume and Stock Returns of NIFTY 50 Companies