The index will track prices of over 30 companies actively traded in the unlisted market and provide analysis and trends through data analytics.
New Delhi: StockX.in, an online unlisted securities portal, has launched India's first private market index known as StockX Private Market Index (SPMI).
Until now, there was no way to track the price movements of privately traded securities (i.e. shares of companies that are not yet listed on the stock market). The biggest challenge in building such an index is the availability of prices. The unlisted market does not have transparent pricing and hence the price may vary from portal to portal and it is quite difficult to compile the price movements and create an index. According to a press release, StockX.in claims to have achieved this by using concepts of indexing and fundamentals.
StocX.in constructs the StockX Private Market Index using a methodology called "Percentage of Change". The index is calculated on 1 January 2022 using 1000 as the base value. The daily prices are aggregated from various dealers like StockX.in and other marketplaces and the percentage change from the previous day's price is calculated. Stock prices that are not available for that day or for the previous period are discarded. For the rest, for which prices are available, the percentage change is calculated. The average of this percentage change is then used to calculate the change in index value.
The index will track prices of over 30 companies actively traded in the unlisted market and provide analysis and trends through data analytics.
The current index value is 1067 which means that the average price of the securities has increased by 6.7% from January 1 to November 30. The press release states that the index will be updated on a daily basis.
The company claims that the index is free from specific biases that are inherent in most public market indices such as selection and survivor bias as it automatically includes all companies whose prices are available for two consecutive days and all those companies Excludes prices of which are not available. Which means the index will keep adding and removing companies based on price availability and since it takes into account only the percentage of change, the effect is that overall an investor gets a pretty good picture of how his portfolio would have looked like. If he had invested in unlisted securities.
Ishita Agarwal, Director, BLACKVOLT Digital Pvt Ltd - operating through its brand StocX.in, said, "We are excited to announce the launch of India's first private market index. It is a new concept for India. As a thought leader in the space of unlisted stocks, we plan to bring some interesting insights and data analytics to consumers and industry participants through this index."
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