1) Title: Relationship of State Bank of India (SBI) with Nifty 50.
2) Author: Sailee Sandeep Khedekar
3) Introduction:
State Bank of India (SBI) is India’s largest public sector bank and a major multinational financial institution headquartered in Mumbai, with a legacy tracing back to the Bank of Calcutta founded in 1806. It offers a wide range of banking and financial services including retail, corporate, investment banking, wealth management, cards, and insurance through its subsidiaries. SBI has an extensive network of over 23,000 branches and 63,000+ ATMs, serving about 500 million customers across India and abroad. The Government of India owns a majority stake in the bank, which plays a pivotal role in the country’s economic development and financial inclusion initiatives. It is a Fortune 500 company and a key component of India’s banking system.
4) Objective: To calculate Beta and observe its significance.
5) Literature review:
· According to the CAPM model, Beta measures the systematic risk of a stock and shows how much its returns move with the market. If Beta is less than 1, the stock is less volatile than the market. Fama, E. F., & French, K. R. (2004). The capital asset pricing model: Theory and evidence. Journal of Economic Perspectives, 18(3), 25–46.
· Studies show that Indian banking stocks like SBI move closely with market indices such as Nifty 50 because banking performance depends on overall economic and market conditions. Sharpe, W. F. (1964). Capital asset prices: A theory of market equilibrium under conditions of risk. The Journal of Finance, 19(3), 425–442.
6) Data collection: Data for SBI and Nifty 50 was downloaded from NSE India.com for the period 01.12.2024 – 30.11.2025. Friday closing prices were found out, weekly returns of Nifty 50 and SBI were calculated. Weekly returns of Nifty 50 were taken as X and weekly returns of SBI were taken as Y. Y was regressed on X.
7) Data Analysis: Return (SBI) = – 0.1208 + 0.9501 (Nifty 50)
N = 49, R Square = 0.4403, F = 36.9813, Pvalue = 2.03
The Above Equation shows the relationship between returns of SBI and Nifty 50. The Negative Sign means there is an inverse relationship between returns of Nifty 50 rises, returns of SBI falls and vice versa. If returns of Nifty 50 rise by one unit, the returns of SBI will fall by 0.9502 units. T Stats for return for Nifty 50 is 6.0812 and the Pvalue is 2.03, so return of Nifty 50 is statistically significant at 1% level, N= 49 so number of observations are 49. R Square is 0.4403 which means 44% of return of SBI depends upon return of Nifty 50 in other words 44% of Variance of return of SBI are explained by returns of Nifty 50. 56% is the error due to variables which are not included in the model. F is 36.9813, Pvalue is 2.03 which means it is more than 1. That means the model is statistically significant.
8) Conclusion: – Beta is less than 1, invest for long term purpose if Nifty 50 is to rise.
9) References: –
· https://www.nseindia.com/get-quote/equity/SBIN/State-Bank-of-India
· https://www.nseindia.com/reports-indices-historical-index-data