Author: Yash Pagaria
Introduction
YES Bank Limited is a leading private sector bank in India, providing a wide range of financial services including retail banking, corporate banking, MSME financing, treasury operations, and digital banking solutions. Over the past few years, the bank has undergone major restructuring supported by regulatory intervention and capital infusion, which has strengthened its balance sheet and improved investor confidence.
As a listed company, the performance of YES Bank’s equity shares is influenced by overall market movements, especially benchmark indices such as the Nifty 50, which represents the broader Indian equity market. Analysing the relationship between YES Bank’s stock returns and the Nifty 50 helps in understanding the bank’s systematic risk and market sensitivity.
Objective
The objective of this study is to examine the relationship between the returns of YES Bank Limited and the Nifty 50 Index by estimating the Beta of YES Bank through regression analysis, and to understand the market risk and investment implications associated with the stock’s performance .
Literature Review
View 1 – P. Sharma & R. Mehra (2024)
A study on Indian private sector banks highlighted that turnaround-phase banks tend to show higher volatility due to sensitivity towards market sentiment and financial restructuring outcomes.
View 2 – S. Iyer & K. Nair (2025)
An empirical analysis of banking stocks in the Nifty index found that private banks generally exhibit higher beta values compared to defensive sectors, reflecting their strong correlation with economic cycles
Data Collection
Secondary data for YES Bank Limited and the Nifty 50 Index was collected from the NSE India website.
- Period of study: Weekly data
- Friday closing prices were used
- Weekly returns were calculated
- Nifty 50 returns were taken as the independent variable (X)
- YES Bank returns were taken as the dependent variable (Y)
- A simple linear regression model was applied, with Y regressed on X
Data Analysis
Return (YES Bank Ltd) = –8.70 – 0.0029 (Nifty 50)
N = 49, R Square = 0.8333, F = 234.95, P-value = 0.0000
The above equation shows the relationship between the returns of YES Bank Limited and the Nifty 50 Index. The negative sign of the Beta coefficient indicates an inverse relationship between YES Bank returns and Nifty 50 returns. This implies that when the return of the Nifty 50 increases, the return of YES Bank tends to decrease marginally, and vice versa.
If the return of the Nifty 50 rises by 1 unit, the return of YES Bank decreases by approximately 0.0029 units. The R² value of 0.8333 indicates that 83.33% of the variation in YES Bank’s returns is explained by movements in the Nifty 50, while the remaining 16.67% is due to firm-specific and other external factors not included in the model.
The F-statistic value of 234.95 with a p-value of 0.0000 indicates that the overall regression model is statistically significant at the 1% level, confirming the reliability of the regression results.
Conclusion
The study shows that YES Bank Limited has a weak and slightly negative relationship with the Nifty 50 during the selected period. Despite the regression model being statistically significant, YES Bank’s stock returns were largely influenced by company-specific factors such as restructuring and recovery measures rather than overall market movements. Therefore, YES Bank is more suitable for short-term or speculative investors who closely track internal developments rather than broad market trends.
References
National Stock Exchange of India Historical Equity and Index Data
https://www.nseindia.com
P. Sharma & R. Mehra (2024)
Study on Risk and Volatility of Private Sector Banks in India Journal of Banking & Finance
S. Iyer & K. Nair (2025)
Market Sensitivity of Banking Stocks Indian Journal of Financial Studies