How Oil and Gas stocks perform in India? Empirical evidence from CAPM and French & Fama Three Factor Models

Giriraj Loya, Emil T Joseph, Pawan Kumar Avadhanam

Abstract


The Oil and Gas Industry is one of the six core industries in India, it has a very significant role to play in the growth of the Indian economy. India is expected to be one of the largest contributors to non-OECD petroleum consumption growth globally. The study consists of 10 largest companies from Oil and Gas Industry operating in India by market share. Out of the total 10 companies 8 are State owned whereas 2 are from Private sector. Ten years data (2006-2016) has been taken for the analysis purpose. The reason for taking these 10 particular years for study is to see the impact of 2007-08 financial crises on Oil and Gas Industry and to see how Oil and Gas Sector reacted to it. The calculated values using asset pricing models shows that the most of the companies are Over-Priced in the market. Further from the calculated values it can be seen that there are no observations which are closer to the calculated value, so we can say that empirical results do not fully support asset pricing models.


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ISSN : 2251-1555