Decision Sciences
5 years ago

Indian Infrastructure Companies Overvalued, Risky Investments Revealed in Study

Research Journal of Social Science & Management
Estimation, Comparison and Association of Realized Returns with Calculated Returns ( Capital Asset Pricing Model): A Case of Infrastructure Sector in India.
Pedapudi Aditya, Mallavajhala Naga Vikhyath, Pawan Kumar Avadhanam

Paper Summary

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The study looked at 9 companies in India's Infrastructure sector over 19 years. Using the CAPM model, it found that all companies were overvalued in the market. The risks and returns were calculated, showing a positive correlation between realized returns and CAPM returns. Factors like Debt-Equity Ratio, Price-Book Ratio, Market Capitalization, Sales, and Profit after Tax were found to be significant in determining company returns.