RELATIONSHIP OF Yes Bank Limited with Nifty 50

AUTHOR

Yash Jain (PGDM-2697)

Institute for Technology and Management, Kharghar

INTRODUCTION
Yes Bank Limited is an Indian private sector bank founded by Rana Kapoor and Ashok Kapoor
in 2004.It primarily operates as a corporate bank, with retail banking and also asset management
as subsidiary functions. Yes Bank Limited derives most of its revenues through
arranging syndicated loans and through corporate banking. It operates as three entities - Yes
Bank, Yes Capital and Yes Asset Management Services.

OBJECTIVE

The objective was to find out the beta of Yes Bank Limited and its significance.

VIEWS AND REVIEWS

Given the decline which markets in the United States saw
on Wednesday when Dow Jones industrial average (DJIA) fell by 494 points
or 1.86 percent, the Indian markets opened on a weak note on Thursday and
witnessed a volatile day of trade. The expiry of weekly options contracts too
added to declines on Dalal Street.
Financial sector stocks continued to witness selling pressures though the
declines were less than what they had seen in Tuesday’s trade. Part of this
stability in financial stocks came because of short covering.
The Yes Bank stock topped the list of those which witnessed short covering as
it gained 22.19 percent, its highest-ever single day gain to close at 39.10. The
rise in the share came on the back of disclosure by the management (after
market hours on Tuesday) that an asset management company, which had
loaned money to the promoter of the bank and was holding shares as
collateral, had sold the bank scrips.
After this clarification and a conference call by the company
on Thursday morning, it was clear that the fall in bank’s shares was not
because of any operational issue, making Bears run for cover.
Yet, the gains in some of the financial stocks were not enough to make the
broader market indices to move into the green territory. The NSE’s Nifty 50
ended the day at 11,313.10 a drop of 46.80 points or 0.41 per cent. The BSE’s
Sensex 30 ended the day with a cut of 198.54 points or 0.52 per cent at
38106. HDFC Bank helped drag Bank Nifty down which ended the day down
307 points or 1.07 per cent at 28,418.
Adding to the pressure of downward draught were some metal stocks which
witnessed declines on worries that the US manufacturing numbers had come
below expectations which essentially means that both demand and prices of
metal would remain under pressure.
A marginal hope for Bulls came in the form of Indian monthly auto sales, with
many companies announcing their number after market close on Tuesday.
While year-on-year basis numbers were lower for all companies, some --
especially in the two-wheeler segment – showed an increase in the month-on-
month figures. The growth in August-September ranged between 5 and 12 per
cent.
However, the fact that it had come before the festive season may be seen as
another positive by the markets. That may indicate that the October auto sales
figures are likely to show higher growth. This led to a marginal rise in the Nifty
Auto Index which ended the day in green at 7,481, a gain of 17 points. The
direction of the index and mood of the market on Friday would be decided by
what RBI announces after its policy meeting.
Link to this Article: https://www.outlookindia.com/website/story/business-news-markets-
get-short-covering-shivers-as-yes-bank-regains-its-mojo/339924

DATA COLLETION

The data for Yes Bank Limited and Nifty 50 was taken from https://www.nseindia.com/
(National Stock Exchange). The data downloaded was from a period of 1-12-2018 to 30-11-
2019 only, the closing rates of all the Fridays in the year were sorted to find out weekly returns
for both Nifty and Yes Bank Limited was taken. The weekly return of Yes Bank Limited was
taken as (Y) and the weekly return of Nifty was taken as (X).

DATA ANALYSIS

Utilizing the Regression Add-on in Microsoft Excel Data Analytics tool below values was
acquired.

Below expression shows the relationship model between Yes Bank Limited and NIFTY50
weekly returns:

Yes Bank Limited = -0.0102408292693028 - 0.524543742603838*(NIFTY50 Weekly

Return)

R Square = 0.00470049506740066

a = -0.0102408292693028

b = -0.524543742603838

F = 0.636149659718346

Significance F = 0.00470049506740066
P-value = 0.636149659718346

N= 50

CONCLUSION

There is a Negative relationship between NIFTY weekly returns and Yes Bank Limited’s
weekly returns.

P-value is more than 0.05 which means we will accept the null hypothesis.

R Square is 0.00470049506740066which means 4.71% of Yes Bank Limited is explained by

Nifty. Rest 95.29% are other factors.

The overall model is statistically significant at 5% level