Feature

Stock Doctors

With more and more tech-savvy millennials looking to invest in the stock market, algorithm-based fintech firms could be the next big thing

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When you think of the stock market, words like uncertainty, risk, and ambiguity immediately pop up. And rightly so, investing in equities is not for the faint-hearted. Investors in India have always been sceptical of investing directly in the stock market, preferring avenues like fixed deposits or mutual funds where close to 40% of the country’s investments are parked. With equity penetration remaining a negligible 3% over the years, it is this stark opportunity that fintech firms such as MarketsMojo, MoneyWorks4me and Capitalmind are eyeing. Each of them use algorithmic platforms to provide information to investors to help manage their equity investments.

Mohit Batra and Joyson Thomas, the former co-founders of Moneycontrol, launched MarketsMojo in March 2015 by investing Rs.6.5 crore of their personal savings. Thus, MarketsMojo came out with a website not only to help interested investors track their portfolios, but also giving them insights by providing five-year financial data for all listed companies. When the duo stepped out with the idea, they knew that there was already a ‘clutter of information’ in the market and presenting all of that would confuse the investors further. Hence, they decided that a five-year period would be an ideal time frame to backtrack the data.

“Over the last 15 years, investors haven’t had actionable information on companies that they can access directly. Predominantly there has been a middle layer consisting of fund managers or brokers, who analyse a set of information which then gets passed on to investors. Even that information is made accessible to a privileged few depending on the size of their investment portfolios. We wanted to change all that through MarketsMojo,” explains Batra, co-founder and CEO. Here is how it works. MarketsMojo, through its algorithms runs close to 400 formulae on the financials of every listed company which not only looks at the immediate quarter performance but also backtracks the last five-year performance. This five-year performance analysis takes into consideration the company’s size, growth, profit and loss statements, balance sheet analysis, shareholding analysis, return analysis, the performance of the company within the industry, its corporate governance, etc. The proprietary formulae are related to the company’s fundamentals and are in-built within the software. Onc

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