StocX.in, an online unlisted securities portal, has launched India’s first private market index known as StocX Private Market Index (SPMI).

Until now, there was no way to track the price movements of privately traded securities (i.e the stocks of companies that are not yet listed in the stock market). The biggest challenge in constructing such an index is availability of price. The unlisted market does not have transparent pricing and therefore price may vary from portal to portal and it is quite difficult to compile price movements and build an index. StocX.in claims to have achieved this by using the concepts of indexing & basic statistics, according to a press release.

StocX.in built the StocX Private Market Index using a methodology known as “Change Percentage.“ The index is computed using 1000 as the base value as on 1January 2022. Daily prices from various dealers such as Stocx.in and other marketplaces are collected and percent change from previous day price is computed. The prices of the shares that are not available for the day or for the previous period are discarded. For the remaining, wherein prices are available, a percentage change is calculated. The average of this percentage change is then used for computing the change in index value.

The index will track prices of more than 30 companies actively traded in the unlisted market and provide analysis and trends through data analytics.

The current index value stands at 1067 which means that from the 1 January to 30 November, the average price of securities have risen 6.7%. The index will be updated on a daily basis, said the press release.

The company claims that the index is free of typical biases that are inherent in most public market indexes like the selection and survivor bias as it automatically includes all companies whose prices are available for two consecutive days and excludes all the companies whose prices are not available. Which means that the index will keep adding and removing companies based on price availability and since it is taking only the percentage of change into consideration, the impact is that overall an investor gets a very good picture of how his portfolio would have done if he had invested in unlisted securities.

Ishita Agarwal,director of BLACKVOLT Digital Private Limited - 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 unlisted shares space, we plan to bring some interesting insights and data analytics through this index for the consumers and industry participants."