Fundamental Determinants affecting Equity Share Prices of BSE-200 Companies in India

Abstract

The stock market plays a pivotal role in the growth of the industry and commerce of the country that eventually affects the economy of the country. This is the reason that government, industry and even the central banks of the country have a close watch on the daily happenings of the stock market. The objective of this paper is to find out the combined effect of key variables on equity share prices of Indian companies that are listed in BSE 200. It can be concluded that Earning Per Share is emerged as significant determinant with the positive sign in three years out of seven years while Dividend Per Share is significantly negative in two years. Book Value Per Share has influenced the market price of share significantly in five out of seven years. Price Earning Ratio has emerged a significant positive determinant in two years out of seven years. Dividend Payout Ratio has emerged as significant determinant of market price of share with the negative sign in two out of the seven years of study.

Key Words : Fundamental Factors, BSE, Equity Share Prices, EPS, DPS etc.