Nifty 500 Multicap
|31st May 2019
|1st April 2005
|31st May 2023
|2nd Dec 2020
|52 Week High:
|52 Week Low:
The Primex 40 index (First Live Private Market Index of India) is designed to provide investors with a benchmark to measure the performance of private companies in India. This index includes companies that are leaders in their respective industries and have a proven track record of growth, profitability, and strong financials.
The companies included in the index represent a diverse range of sectors. The Primex 40 index is calculated based on the market value of the companies included in the index. The index is calculated in real-time. The index's value is calculated using a market capitalization-weighted methodology, which means that the larger the company's market capitalization, the more weight it carries in the index.
Investors can use the index to track the performance of India's top unlisted & delisted companies and gain insights into the private equity market's overall performance. Investors can also use the index to compare the performance of private companies with publicly traded companies and make informed investment decisions.
Selection Criteria: Companies are considered for inclusion based on their trading history in the unlisted market, availability of shares in the market, sector dominance, and the number of public shareholders. This approach ensures that selected companies have a proven market presence, sufficient liquidity, diversified sector representation, and interest from public investors.
Determining Weight of Companies: The weight of each company in the index is determined using the average market cap of the total market cap and the free float market cap. The average market cap reflects the overall market value, while the free float market cap focuses on the portion of shares available for public trading, excluding restricted shares.
Weight Capping: To maintain a balanced representation, a weight cap of 10% is implemented for a single stock in the index. This cap prevents excessive concentration and reduces the risk associated with overreliance on any particular company. By limiting the weight, the index mitigates potential distortions and promotes diversification.
Addition and Removal of Companies: Companies that are listed on a stock exchange are immediately removed from the index. This ensures that the index remains focused on the unlisted market and aligns with its intended purpose. New companies are added based on the selection criteria, allowing the index to capture emerging companies with growth potential and a strong foundation in the unlisted market.
Rebalancing: Regular rebalancing is conducted every three months to maintain the index's accuracy and relevance. Additionally, rebalancing is triggered by corporate actions within the current index constituents, such as mergers, acquisitions, stock splits, or other significant events that impact market capitalization or free float.
What is the need for an Index?
The need for an index in the private market is essential due to several reasons. Firstly, the private market lacks the organization and structure of the public market, making it challenging for investors to keep track of all companies and their performance. An index serves as a benchmark that aggregates the performance of a selected group of companies, providing investors with a reference point to compare their investments and make better-informed decisions.
Secondly, diversification is crucial in the private market to mitigate risks. Investing in specific companies or sectors can be risky, but an index helps address this issue by including companies from various industries or sectors. This diversification reduces the risk associated with individual investments and provides a more balanced exposure to different segments of the private market.
Furthermore, an index allows investors to track market trends in the private market. It provides insights into the overall performance, highlights sectors experiencing growth, and identifies areas of concern. This information empowers investors to identify potential investment opportunities and make informed decisions aligned with the prevailing market trends.
Transparency is another significant benefit of an index. By providing information about the included companies and the methodology used, the index enhances transparency and builds investor confidence. Investors can understand how the index is constructed and managed, thus increasing trust in the index as a reliable measure of the private market's performance.
Additionally, an index can serve as an indicator of the broader economy. Changes in the index's value and composition can reflect the overall health of the private market, offering insights into economic trends and developments. This information allows investors to gauge the state of the economy and adjust their investment strategies accordingly.
Moreover, an index enables investors to measure the performance of their private market investments against the benchmark. By comparing their returns to the index, investors can evaluate the success of their strategies and make necessary adjustments.
Lastly, an index generates valuable historical data capturing the performance of the private market over time. This historical data is essential for analysis, forecasting, and identifying long-term trends. Investors can utilize this data to study past market behavior, evaluate risk and return patterns, and make informed decisions based on historical performance.
In conclusion, an index fulfills the need for benchmarking, diversification, tracking market trends, transparency, economic indicators, performance measurement, and access to historical data in the private market. By providing these benefits, an index enhances investors' ability to navigate the complexities of the private market and make well-informed investment decisions.
Limitations of the Index:
Limited Availability of Latest Shareholding Pattern: Due to the unavailability of up-to-date shareholding pattern data for various companies, the index relies on the last available data. This limitation may result in the index not accurately reflecting the current ownership structure of the included companies.
Price Quotation Challenges: Since prices are not regularly quoted in the unlisted market, the index has to rely on reference prices obtained from various vendors. This reliance introduces the potential for discrepancies and inaccuracies in the pricing data used for index calculation.
Infrequent Trading Activity: The unlisted market may experience infrequent trading activity, with gaps in trading occurring on certain days. To address this limitation, the index fills these trading gaps by using the last available price. However, this approach may not capture the true market dynamics and could lead to distortions in the index performance during periods of limited trading.
Lack of Real-Time Updates: The index may not reflect real-time changes in shareholding patterns and prices due to the limitations mentioned above. Investors relying on the index may experience a lag in accessing the most current information, potentially impacting their ability to make timely investment decisions.
Potential Price Discrepancies: The reliance on reference prices from various vendors introduces the possibility of price discrepancies between different sources. This variation in price data may impact the accuracy and consistency of the index calculation, leading to potential deviations from the true market value of the included companies.
Limited Transparency and Verification: The unlisted market generally lacks the same level of transparency and regulatory oversight as the listed market. As a result, there may be limitations in verifying the accuracy and reliability of the data used for index construction, which can introduce inherent risks and uncertainties.
Note: These limitations highlight the challenges associated with data availability, pricing, and trading activity in the unlisted market. Investors need to be aware of these limitations and consider them when using the index for investment decision-making.
The following disclaimer sets forth important information regarding the usage and interpretation of the index provided by Wealth Wisdom India Private Limited (WWIPL), which tracks the performance of the unlisted equity market of India. Before accessing or relying on the information provided, it is crucial to carefully read and understand the terms and conditions outlined in this disclaimer. By accessing or using the index, you acknowledge and agree to be bound by the terms set forth herein.
Index Information: The index provided by WWIPL is designed to track the performance of the unlisted equity market of India. The information contained in the index is based on data and sources that are believed to be reliable. However, WWIPL does not guarantee the accuracy, completeness, or reliability of the information provided. The index may be subject to adjustments, corrections, and changes over time, which may affect its accuracy.
Not Financial or Investment Advice: The information and data provided by WWIPL in the index are intended for informational purposes only and should not be considered financial or investment advice. The index is not a recommendation to buy, sell, or hold any securities or investments. The decision to engage in any investment activity should be based on your own research, analysis, and professional advice from qualified financial advisors.
Risks and Limitations: Investing in unlisted equities or any other financial instruments involves risks. The index provided by WWIPL is not an indicator of future performance or a guarantee of investment returns. The past performance of the index or any securities mentioned in it is not indicative of future results. The value of investments can fluctuate, and investors may lose all or part of their investment. It is essential to carefully assess your financial situation and risk tolerance before making any investment decisions.
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