Business Analyst Journal

Flexibility in investments helps an investor optimize his investment portfolio to suit his return-risk profile, which keeps changing with time. The motivation for this study arose from a significant research gap. There have been scant studies on the dis-aggregative aspects affecting investments. This paper assesses Indian equity returns (from the investors’ point of view) factoring both sources of income – viz., dividends and capital gains. Further, the objective of this paper was to enrich the flexibility of the reader/investor, on equity investments, by analyzing dis-aggregative parameters like age, size, ownership structure and underlying sector/industry affiliation and their impact (if any) on returns. This would provide the investor with the much desired flexibility in designing his/her portfolio. The sample for the study comprises of the NSE 500 companies and the period, under study, is spread over the past 15 years (2001-2014). The chosen sample (NSE 500 companies) represent 96.76 per cent of the free-float market capitalization and 97.01 per cent of the traded value of the stocks listed on the NSE as on December 31, 2013. According to the findings, the returns vary along with the various segregates, providing the investors diversification opportunities, based on the same. A negative correlation appears between the age of companies and returns. Further, small and medium sized companies yield higher returns compared to their large counterparts. The apparent ‘age’ and ‘size’ anomalies are also indicative of the status of market efficiency.

Sustainability of a business may be expressed as the capacity of an organisation to continue its operations over a long period of time and depends to a large extent on stakeholder relationships. Sustainability reporting is being used as a communication tool to highlight organisation commitment towards sustainability and enhance relationships with stakeholders. With some stakeholder groups being in a position to influence the quality of sustainability disclosures, the objective of this paper is to find if the quality of disclosures in sustainability reports is influenced by pressure from key stakeholders groups like customers, investors, employees and NGOs or environmental organisations. To achieve the objectives a dimension of quality of sustainability disclosures is extracted using Principal Component analysis (PCA) technique of factor analysis. Industrial sector, listing status and size of the organisation are used as proxy for stakeholder salience. Using step wise multiple linear regression, the study finds causal relationship between quality of disclosures and stakeholder salience. The results show that organisations operating in environmentally sensitive sector, consumer contiguous sector, financial sector, in areas where sustainability reporting is regulated, large size and listed organisations and provide high quality disclosures.