Flow of the presentation <br />Indian oil and gas industry <br />Profile of the concerned organizations<br />And their div...
Oil and Gas industry <br />India has total reserves (proved & indicated) of 1,201 million metric tonnes (MMT) of crude oil...
Industry profile<br />Public Sector Undertakings (PSU's):<br />ONGC - Oil & Natural Gas Corp (exploration and production)<...
Overview of the Industry <br />
Companies Profile <br />
IOCL Share holding Pattern <br />
RIL Capital structure <br />
RIL<br />
Capital Structure <br />
ONGC Share holding pattern<br />
Dividend History(ONGC)<br />
HPCL Capital Structure<br />HPCL	<br />	Mar '10	<br />Sources Of Funds	in RS. Cr	<br />Total Share Capital	               ...
HPCL Share holding pattern<br />
Dividend History( HPCL)<br />
NTPC Capital structure <br />
NTPC share holding pattern<br />
Event study <br />An Event study is a statistical method to assess the impact of an event on the value of a firm.<br />Her...
Abnormal Return<br />
Constant Return Model  <br />
Market Model <br />
Economical model <br />Most appropriate model is Capital Asset Pricing Model(CAPM).<br />    Re = Rf + B(Rm – Rf)<br />Rm ...
CAPM <br />Model<br />E(Re) = 7.14 + B(12.59-7.14) +<br />E(Re) = 7.14 + B(5.44)<br />
Normally distribute <br />
Hypothesis <br />   Ho: The dividend payout has no impact on the  behavior of returns.<br />
Hypothesis Testing <br />
Estimation and Absorption Period <br />       90 days                                               15 days<br />
Methodology <br />Step 1. a) Test market model<br />             b) if found significant use Paired T-Test<br />Step 2. a)...
 Step 1.  ONGC Regression Model<br />
Step 1.b) <br />Regression model says that market returns are significantly influencing the security returns.<br />Market ...
ONGC Dividend Impact <br />There is no significant impact by the dividend payout.<br />
RIL Regression model <br />
Step 2<br />Regression model is not able to explain behavior of the security returns by market returns.<br />So we decided...
Impact <br /> Impact = Actual return( 15 days)-Expected return( 15 days)<br />               =(-0.03432) -.57<br />       ...
HPCLDividend pay out impact using CAPM<br />
ONGCImpact analysis<br />
IOCL<br />
NTPC<br />
RIL<br />
Discriminant analysis <br />Objective:- 1. To evaluate the dividend payout decision.<br />                    2. To identi...
Study reliability<br />
Decision Criteria <br />
Decision Function <br />-1.784<br />.784<br />
Influencing factors <br />
Findings<br />IOC<br />Essar oil<br />RIL, NTPC, ONGC<br />HPCL<br />
Thank You<br />
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Cf final ppt

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Cf final ppt

  1. 1.
  2. 2. Flow of the presentation <br />Indian oil and gas industry <br />Profile of the concerned organizations<br />And their dividend policies in brief <br />Introduction of “event study”<br />Discussion of the event study results<br />Discriminant Analysis<br />
  3. 3. Oil and Gas industry <br />India has total reserves (proved & indicated) of 1,201 million metric tonnes (MMT) of crude oil and 1,437 billion cubic metres (BCM) of natural gas as on April 1, 2010.<br />Growth rate was 2.2% for the 2009-10 financial year.<br />Total dividend payout by the industry was Rs 178 Billion. <br />
  4. 4. Industry profile<br />Public Sector Undertakings (PSU's):<br />ONGC - Oil & Natural Gas Corp (exploration and production)<br />OIL - Oil India Limited (exploration & production)<br />IOC - Indian Oil Corporation (refining & marketing)<br />BPCL - Bharat Petroleum Corporation Ltd (refining and marketing)<br />HPCL - Hindustan Petroleum (refining & marketing)<br />GSPC - Gujarat State Petroleum Corp<br />Private Oil & Gas companies in India<br />RIL - Reliance Industries Limited (Indian Oil & gas company)<br />ESSAR (Indian Oil & Gas company)<br />Cairns Energy India<br />BG energy<br />Niko (upstream exploration & production)<br />Shell Oil<br />BP<br />Total (downstream exploration & production, chemicals)<br />
  5. 5. Overview of the Industry <br />
  6. 6. Companies Profile <br />
  7. 7.
  8. 8. IOCL Share holding Pattern <br />
  9. 9. RIL Capital structure <br />
  10. 10. RIL<br />
  11. 11. Capital Structure <br />
  12. 12. ONGC Share holding pattern<br />
  13. 13. Dividend History(ONGC)<br />
  14. 14. HPCL Capital Structure<br />HPCL <br /> Mar '10 <br />Sources Of Funds in RS. Cr <br />Total Share Capital 339.01<br />Equity Share Capital 339.01 <br />Share Application Money 0 <br />Preference Share Capital 0 <br />Reserves 11,218.96 <br />Revaluation Reserves 0.00 <br />Equity 11,557.97<br />Secured Loans 1,375.88<br />Unsecured Loans 19,926.49<br />Total Debt 21,302.37<br />
  15. 15. HPCL Share holding pattern<br />
  16. 16. Dividend History( HPCL)<br />
  17. 17. NTPC Capital structure <br />
  18. 18. NTPC share holding pattern<br />
  19. 19. Event study <br />An Event study is a statistical method to assess the impact of an event on the value of a firm.<br />Here we take dividend payout as an event.<br />
  20. 20. Abnormal Return<br />
  21. 21. Constant Return Model <br />
  22. 22. Market Model <br />
  23. 23. Economical model <br />Most appropriate model is Capital Asset Pricing Model(CAPM).<br /> Re = Rf + B(Rm – Rf)<br />Rm = Average market return <br />Rf = risk free return <br /> B =  Sensitivity of the asset returns to the market returns.<br />
  24. 24. CAPM <br />Model<br />E(Re) = 7.14 + B(12.59-7.14) +<br />E(Re) = 7.14 + B(5.44)<br />
  25. 25. Normally distribute <br />
  26. 26. Hypothesis <br /> Ho: The dividend payout has no impact on the behavior of returns.<br />
  27. 27. Hypothesis Testing <br />
  28. 28. Estimation and Absorption Period <br /> 90 days 15 days<br />
  29. 29. Methodology <br />Step 1. a) Test market model<br /> b) if found significant use Paired T-Test<br />Step 2. a) if market model is not capable in explaining the behavior of the security, use CAPM model.<br /> b) impact analysis by expected actual(returns) <br />
  30. 30. Step 1. ONGC Regression Model<br />
  31. 31. Step 1.b) <br />Regression model says that market returns are significantly influencing the security returns.<br />Market model is able to explain the variation in the security returns.<br />We decided to go with “Market Model”<br /> Model<br />E(Re) = -0007+ .562(Rm)<br />
  32. 32. ONGC Dividend Impact <br />There is no significant impact by the dividend payout.<br />
  33. 33. RIL Regression model <br />
  34. 34. Step 2<br />Regression model is not able to explain behavior of the security returns by market returns.<br />So we decided to use CAPM model.<br />Model<br />E(Re) = 7.14 + 5.44*1.06 ( annual)<br />E(Re) = 12.906 % (annual)<br />
  35. 35. Impact <br /> Impact = Actual return( 15 days)-Expected return( 15 days)<br /> =(-0.03432) -.57<br /> = -.6075<br />There is negative impact by dividend payout.<br />
  36. 36. HPCLDividend pay out impact using CAPM<br />
  37. 37. ONGCImpact analysis<br />
  38. 38. IOCL<br />
  39. 39. NTPC<br />
  40. 40. RIL<br />
  41. 41. Discriminant analysis <br />Objective:- 1. To evaluate the dividend payout decision.<br /> 2. To identify the variables, which affect the dividend payout decision. <br />Sample size = 88 companies from various industries.<br />
  42. 42. Study reliability<br />
  43. 43.
  44. 44. Decision Criteria <br />
  45. 45. Decision Function <br />-1.784<br />.784<br />
  46. 46. Influencing factors <br />
  47. 47.
  48. 48. Findings<br />IOC<br />Essar oil<br />RIL, NTPC, ONGC<br />HPCL<br />
  49. 49. Thank You<br />

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