Author \u2013 Viraj Wani
\nINTRODUCTION
\nVaibhav Global Limited (VGL), through its distinctive business model, has created a niche for itself in the global retail space, especially in the jewelry, accessories, and lifestyle product segments of two of the largest economies of the world – the US and UK. VGL was founded as Vaibhav Enterprises in 1980. It was later incorporated as Vaibhav Gems Limited, in 1989 at Jaipur, India. The company became Vaibhav Global Limited in 1994 and went public in 1996-97. VGL continued expanding its manufacturing and retail capabilities and in 2005-06 acquired STS Group of companies.<\/p>\n
During the recession of 2008-09, the purchasing power of US consumers dropped significantly and VGL had to rework its strategy. The company brought the average price of its products down to $18 – $20 from $100 per piece in 2010 thereby, successfully transitioning from store-based jewelry business to discount retail business through web and TV channels.<\/p>\n
It has electronic retail units: Shop LC formerly Liquidation Channel in the US & Canada and TJC formally The Jewellery Channel in UK & Ireland. These are wholly owned TV channels as well as e-commerce platforms. The combined reach of these two TV channels is about 123 million households.<\/p>\n
OBJECTIVE
\nTo calculate the beta of the company and find its significance<\/p>\n
VIEWS BY AXIS DIRECT
\n \u2666 \u2018Budget Pay\u2019 EMI scheme and easy returns policy led to robust sales growth
\n \u2666 TV volumes grew by 15% YoY in Q4FY17. TV Average Selling Price (ASP) reduced from USD 28 in Q4FY16 to USD 25 in Q4FY17
\n \u2666 Web volume growth at 20% YoY in Q4FY17 with ASP growing marginally from USD 17 in Q4FY16 to USD 18 in Q4FY17. VGL is offering select products on various online marketplaces (e-bay, Amazon, etc.)
\n \u2666 Liquidation channel successfully rebranded as Shop LC in the US<\/p>\n
DATA COLLECTION
\nData of index and equity were collected from https:\/\/www1.nseindia.com\/ and https:\/\/www.nseindia.com\/ respectively. Daily returns from 1st March-2021 to 28 Feb-2022 were downloaded in excel format from these websites and it was sorted into a weekly format. Then weekly returns were calculated for both index and equity and then regression analysis was done.
\nDATA ANALYSIS
\nPredicted Y= 0.003256 + 0.0207x
\nN=47, R Square= 0.135527, F= 6.898041
\nTstat (beta) =\t6.24053832901454
\nTstat (0.05,45) = 2.0141<\/p>\n
The above regression equation tells us the relationship between X and Y. Where X is NIFTY\u2019s weekly returns and Y is Vaibhav Global\u2019s weekly returns.
\nThe positive sign of Beta tells us that there is a positive relationship between NIFTY and Vaibhav Global\u2019s weekly returns.
\nFrom the equation, it can be seen that if X rises by 1 unit, Y will rise by 0.0032567 units.
\nT calculated is more than T tabulated which means, \u03b2 is statistically significant at a 5% confidence level.
\nR^2 is 0.014817 which means 1.4% of Y (Vaibhav Global) is explained by X. And the balance is explained by error.
\nF is 0.66177 which is more than the table value which means the model is statistically significant at a 5% level.<\/p>\n
CONCLUSION
\n\u03b2 is statistically significant in the case of NIFTY and Vaibhav Global. Also, it can be concluded that Vaibhav Global is a High beta share. Since it is higher than 1 <\/p>\n","protected":false},"excerpt":{"rendered":"
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