Former Sebi-chief Damodaran launches midcap corporate governance index ATOM

Airawat Indices Pvt Ltd, a joint venture firm founded by former Sebi Chairman M Damodaran and Decimal Point Analytics, has launched a new index ATOM, comprising 30 midcap companies listed on stock exchanges.

ATOM (Airawat Touchstone MidCap Index) is a thematic index designed to serve investors seeking to invest in "well-governed mid-cap companies", the company said in a release.

The joint venture has selected these 30 midcap companies from the AMFI's (Association of Mutual Funds in India) list of midcap 150 stocks as the starting point of its scoring methodology.

Damodaran, former Chairman of UTI and IDBI, also announced a Corporate Governance Index for midcap companies.

The methodology to select the 30 companies in ATOM captures the financial quality and corporate governance standards of the AMFI midcap universe, it said, adding the index is reconstituted every six months based on revisions AMFI makes to its list of 150 midcap companies.

Speaking at the launch of ATOM, Damodaran said: "The midcap space is conventionally thought to be risky and full of dodgy companies. However, we decided to explode this myth and found a way to systematically identify well-governed companies to create ATOM".

He further said with the rapid growth of asset management services in India, having a handful of index providers may prove to be insufficient.

"Airawat, as a new entrant, is committed to finding new and innovative segments in the markets and creating indices around which investors can build unique portfolios," he said.

Ashutosh Bishnoi, Advisor to Airawat and a former Board member of the Association of Mutual Funds of India, said ATOM represents the best quality of midcap companies in India.

"On a CAGR basis, it outperformed the 150 midcap stocks over the last five years by over 500 bps and yet significantly underperformed over the last one year," he said.

Decimal Point Analytics serves capital market institutions in Europe and the US from its offices in London, New York, Gift City, Nashik and Mumbai. Decimal Point already handles the management of over 400 indices for global index companies, the release said.