{"id":24926,"date":"2026-03-22T14:15:34","date_gmt":"2026-03-22T08:45:34","guid":{"rendered":"http:\/\/www.sachdevajk.in\/?p=24926"},"modified":"2026-03-22T14:15:34","modified_gmt":"2026-03-22T08:45:34","slug":"relationship-between-nifty-50-and-power-finance-corporation-ltd","status":"publish","type":"post","link":"http:\/\/www.sachdevajk.in\/?p=24926","title":{"rendered":"Relationship between Nifty 50 and Power Finance Corporation Ltd ."},"content":{"rendered":"

Title: Relationship between NIFTY- 50 and Power Finance Corporation Ltd.<\/span><\/b><\/p>\n

Author: Pooja Ajit Kasar (79)<\/span><\/b><\/p>\n

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

Power Finance Corporation Ltd (PFC) is a leading Government of India-owned non-banking financial company (NBFC) primarily focused on financing the power sector. Established in 1986 under the administrative control of the Ministry of Power, PFC plays a crucial role in funding generation, transmission, and distribution projects across India. The company provides a wide range of financial products, including term loans, project financing, and consultancy services. It is listed on major stock exchanges and is also a constituent of key indices like Nifty 50 (in recent rebalancing contexts). With strong government backing and consistent profitability, PFC has emerged as a significant player in infrastructure financing and power sector development.<\/span><\/p>\n

Objectives: <\/span><\/b>To calculate beta & observe its significance<\/span>.<\/span><\/p>\n

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

1.\u00a0 \u00a0The beta estimation in Indian stock markets this study examines how beta is estimated in the Indian stock market<\/b> and evaluates its reliability using statistical tools like regression and residual analysis.\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 the research highlights that beta is widely used to measure market risk but may sometimes give biased results due to issues like volatility and data irregularities. (Dash<\/span>, M. (2015)<\/span><\/p>\n

2.\u00a0 An Empirical CAPM Exploration<\/span><\/b> this research uses the Capital Asset Pricing Model (CAPM) to analyse how beta explains stock returns in the Indian market. It finds that market risk (beta) significantly\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0influences stock returns, confirming that stocks move in relation to market indices like Nifty 50.<\/span> (<\/span>Farhana, K. C. P. M., & Azees, A. P. (2025).<\/span><\/p>\n

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

1.\u00a0 \u00a0 \u00a0 <\/span><\/span><\/span>Data for Nifty 50 or your company was downloaded from National Stock Exchange company for the period 1st<\/sup> January,2025 to 31st<\/sup> December,2025. The data was manipulated to get Friday closing prices of Nifty Fifty and Power Finance Corporation Ltd.<\/span><\/p>\n

2.\u00a0 \u00a0 \u00a0 <\/span><\/span><\/span>Weekly returns were calculated. Weekly<\/span>\u00a0returns of nifty fifty are (X) and weekly returns of your company (Y) was regress on (X).<\/span><\/p>\n

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

Y= 0.9395+1.0165x<\/span><\/b><\/p>\n

N= 48, R2<\/sup> = 0.94363 F = 770.147, t Stat = 27.75, P-value = 2.2543<\/span><\/b><\/p>\n

The regression equation indicates the relationship between <\/b><\/span>Market Return (X)<\/span><\/strong> <\/b>and <\/b><\/span>Power Finance Corporation Return (Y)<\/span><\/strong>. <\/span><\/b>The <\/span>R Square value is 0.94<\/span><\/strong>,<\/span><\/b> which means <\/span>94% of the variation<\/span><\/strong> <\/b>in Power Finance Corporation\u2019s return is explained by the Market Return, while the remaining <\/b><\/span>6% is due to other factors<\/span><\/strong> <\/b>not included in the model. This shows a <\/b><\/span>very strong explanatory power<\/span><\/strong> <\/b>of the model. The <\/b><\/span>F value is 770.15<\/span><\/strong> <\/b>with a <\/b><\/span>Significance F (p-value) of 0.000<\/span><\/strong>, <\/span><\/b>which is <\/b><\/span>less than 0.05<\/span><\/strong>. <\/span><\/b>Hence, the overall regression model is <\/b><\/span>highly statistically significant at the 5% level<\/span><\/strong>. <\/span><\/b>The <\/span>p<\/span><\/strong>–<\/span><\/strong>value of the coefficient for Market Return is 2.25E-30<\/span><\/strong>, which is also <\/b><\/span>less than 0.05<\/span><\/strong>. <\/span><\/b>This indicates that <\/b><\/span>Market Return has a statistically significant impact<\/span><\/strong> <\/b>on Power Finance Corporation\u2019s return. The <\/b><\/span>intercept is 0.94<\/span><\/strong>, meaning that if the Market Return is <\/span>0<\/span><\/strong>, the return on Power Finance Corporation is expected to be approximately <\/b><\/span>0.94%. The<\/span><\/strong>\u00a0<\/span>c<\/span><\/strong>oefficient (beta) of Market Return is 1.02<\/span><\/strong>, which implies that for every <\/b><\/span>1 unit increase in Market Return<\/span><\/strong>, <\/span><\/b>Power Finance Corporation\u2019s return increases by <\/b><\/span>1.02 units<\/span><\/strong>.<\/span><\/b><\/b><\/p>\n

This shows that the stock return of Power Finance Corporation is <\/b><\/span>slightly more volatile than the market<\/span><\/strong> <\/b>and moves <\/span>very closely in the same direction as the market (high positive correlation)<\/span><\/strong>.<\/span><\/b><\/p>\n

Conclusion: \u00a0<\/span><\/span><\/b><\/p>\n

The regression analysis shows that Power Finance Corporation has a strong and significant relationship with the market. With a high R\u00b2 of 0.94, most of the stock\u2019s movement is explained by market returns. The beta of 1.02 indicates that the stock moves slightly more aggressively than the market, but largely in the same direction. Overall, the model is statistically significant, confirming that market performance is a key driver of the company\u2019s returns.<\/span><\/p>\n

\u00a0<\/span><\/b>Preferences:<\/span><\/b><\/p>\n

Dash, M. (2015). Beta estimation in Indian stock markets: Some issues<\/i>. Asian Journal of Finance & Accounting, 7(2).<\/span><\/p>\n

Farhana, K. C. P. M., & Azees, A. P. (2025). Revisiting beta dynamics in Indian stock market: An empirical CAPM exploration<\/i>. Journal of Informatics Education and Research, 5(3).<\/span><\/p>\n

\u00a0<\/span><\/p>\n

\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Title: Relationship between NIFTY- 50 and Power Finance Corporation Ltd. Author: Pooja Ajit Kasar (79) Introduction: Power Finance Corporation Ltd (PFC) is a leading Government of India-owned non-banking financial company (NBFC) primarily focused on financing the power sector. Established in 1986 under the administrative control of the Ministry of Power, PFC plays a crucial role… Continue reading Relationship between Nifty 50 and Power Finance Corporation Ltd .<\/span><\/a><\/p>\n","protected":false},"author":140164,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-24926","post","type-post","status-publish","format-standard","hentry","category-uncategorized","entry"],"_links":{"self":[{"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/24926","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/users\/140164"}],"replies":[{"embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=24926"}],"version-history":[{"count":1,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/24926\/revisions"}],"predecessor-version":[{"id":24927,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/24926\/revisions\/24927"}],"wp:attachment":[{"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=24926"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=24926"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=24926"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}