{"id":23509,"date":"2025-12-29T21:12:58","date_gmt":"2025-12-29T15:42:58","guid":{"rendered":"https:\/\/www.sachdevajk.in\/?p=23509"},"modified":"2025-12-29T21:12:58","modified_gmt":"2025-12-29T15:42:58","slug":"relationship-of-shriram-finance-limited-with-the-nifty-50","status":"publish","type":"post","link":"http:\/\/www.sachdevajk.in\/?p=23509","title":{"rendered":"Relationship of Shriram Finance Limited with the Nifty 50"},"content":{"rendered":"

Author name<\/span><\/b><\/span> \u2013 Sarthak Manral<\/span><\/span><\/p>\n

Introduction<\/span><\/b><\/span> \u2013 <\/span><\/span><\/p>\n

\u00a0<\/span><\/span><\/span>Established in 1979, Shriram Finance is one of India\u2019s largest retail Non-Banking Financial Companies, managing assets worth over \u20b92.81 trillion. The company specializes in financing for commercial vehicles, two-wheelers, cars, MSMEs, and gold loans, while also offering fixed deposits and investment plans. It operates through a massive pan-India network of over 3,225 branches, serving more than 9.6 million customers across both rural and urban areas. Following the 2022 merger of Shriram Transport and Shriram City Union, the company has recently attracted major global interest, including a significant 20% stake investment by MUFG Bank in late 2025.<\/span><\/span><\/p>\n

Objective<\/span><\/b><\/span>–<\/span><\/span><\/p>\n

To calculate the Beta of Shriram Finance Limited and Observe its significance.<\/span><\/span><\/p>\n

Literature Review<\/span><\/b><\/span>–<\/span><\/span><\/p>\n

View 1- Deepa Solanki & Dr. Nirali Shah<\/b> (2025)<\/span><\/span><\/p>\n

An Analytical Study of Financial Performance of Selected Listed NBFCs in India. Compared Shriram Finance with peers like Bajaj Finance. Noted Shriram\u2019s strong recovery in profitability and solvency ratios post-merger, despite maintaining a higher debt-to-equity ratio typical of the NBFC sector.<\/span><\/span><\/p>\n

View 2 – Alok Kumar Pandey & Aman Kumar Jha<\/b> (2025)<\/span><\/span><\/p>\n

Nifty 50 in Perspective: A Study of Returns, Drawdowns, and Systemic Outcomes. Examined long-term investment horizons. Found that over 7-year and 10-year periods, the Nifty 50 delivered positive returns 100% of the time, highlighting its resilience despite short-term volatility.<\/span><\/span><\/p>\n

Data Collection<\/span><\/b><\/span>–<\/span><\/span><\/p>\n

Data for the Shri Ram Finance Limited and Nifty 50 was downloaded from NSE India.com for the period 1\/12\/2024 to 30\/11\/25, Friday closing prices was found out, weekly returns of nifty 50 and shri ram finance were calculated weekly returns of nifty 50 were taken as \u2018X\u2019 and weekly returns of the shri ram finance were taken as \u2018Y\u2019. \u2018Y\u2019 was regressed on \u2018X\u2019.<\/span><\/span><\/p>\n

Data Analysis<\/span><\/b><\/span> \u2013<\/span><\/span><\/p>\n

\u00a0<\/span>Return (Shriram Finance Ltd) = <\/span><\/span>0.8148<\/span><\/span>+ <\/span><\/span>1.1862<\/span><\/span>(Nifty 50)<\/span><\/span><\/p>\n

\u00a0\u00a0\u00a0 <\/span>N=49, R Square = 0.249, F= 14.91, P value = 0.00036<\/span><\/span><\/p>\n

The above equation shows the relationship between returns of Shriram Finance Ltd and Nifty 50. The \u2018positive sign\u2019 means there is direct relationship which means return of Nifty 50\u00a0 <\/span>\u00a0<\/span>rises returns of Shriram Finance Ltd rises and vice versa. If return of Nifty 50 \u00a0<\/span>rises by 1 unit, the return of Shriram finance Ltd \u00a0<\/span>will raise by 1.1862 units , \u2018T stat\u2019 for the return for Nifty 50 is 1.61 and P value is 0.00036 so, return of Nifty 50 is statistically significant at 1% \u00a0<\/span>level\u00a0 <\/span>and N=48 , so the number of observation are 48 , R2<\/sup>=0.249 which means 24.9 % of the return of Shriram Finance Ltd depend on the return of Nifty 50 in other words 24.9 % of variances of Return of Shriram Finance Ltd are explained by return of Nifty 50 , 75.1 % is the error due to the variable which are not included in the model . F is 14.91, P value is 0.00036 which means it is less then1 overall the model statically significant at 1 % level.<\/span><\/span><\/p>\n

Conclusions-<\/span><\/b><\/span><\/p>\n

\u00a0<\/span>Beta is more than one, invest in this company for short term if Nifty is to rise.<\/span><\/span><\/p>\n

Reference<\/span><\/b><\/span>–<\/span><\/span><\/p>\n