Modelling the Foreign Portfolio Investor Shareholding of Select Private Sector Banks in India

Abstract

This paper projects a financial model involving key capital market financial variables such as FPI shareholding, Market Price, Earning Per Share (EPS), Price to Earnings Ratio (P/E Ratio), Book Value, Price to Book Value (P/B Ratio), Dividend Yield, Enterprise Value, Market Capitalisation, Beta, Net Profit and Operating Profit and determines the impact of these financial variables on the FPI shareholding of the Banks. The selected private banks include: Axis Bank Ltd., HDFC Bank Ltd., Kotak Mahindra Bank Ltd., Yes Bank Ltd. and ICICI Bank Ltd.The Study is based on 14 yearsQuarterly data from June 2005 to March 2019, obtained from secondary sources. The statistical tools used for the study are Analysis of Variance, Karl Pearson Coefficient of Correlation, Regression and Chi- Square Test for Goodness of Fit to test hypothesis of the study. The data was analysed using statistical packages for social sciences.Our study concludes that different financial variables impacted the FPI shareholding of each selected banks. It was also found that the model framed was a Good fit to the FPI shareholding of all the select banks.This model will help to estimate the future values of FPI shareholding of the selected banks provided the values of significant financial variable corresponding to the required period is known