Have you ever wondered what the consumer sentiment is across India about the current and future prices of onions? Or what homemakers across the country are thinking about inflation and the increased cost of managing a household? The answer is probably a big yes but till recently, India never had a reliable index to answer these questions with clear-cut data points. In October 2011, Rashid Bilimoria and his investors, Zod
ius and Anthemis Group, launched BluFin Advisors India Pvt. Ltd. (BluFin), a financial information company, with its consumer confidence index (CCI) which measures the consumer sentiment across a variety of factors including inflation, spending, employment conditions and personal expectations. The company is now focused on launching a range of products and financial/economic indices to measure the macro-economic health of India, statistically. Additionally, the company is working on launching a series of featured indices such as the Onion Index, Housewives Index and Corruption Index. Their belief is that this can help investors – both individual and institutional – gauge the health of economy better and hence, make better investment decisions.
The role of consumer sentiment
“In India, most individual investors are still in stock-picking mode. You take advice from your broker or your knowledgeable uncle. It is like how it was in the U.S. in the 1970s. At BluFin, we’re convinced that investment decisions have to be made scientifically. That is where we come in,” says Bilimoria. In addition to individuals, BluFin’s data can be extremely useful to institutional investors and asset management firms. The CCI is prepared by conducting interviews with over 4000 households, each filled with indepth questioning. This survey is conducted through a partner company, TNS, a leading market research company that has conduced consumer sentiment surveys in various countries including the U.K. and Australia. It captures everything from the state of education and employment to the status of healthcare facilities in various cities. It captures the sentiment of people by age group, by profession and even by salary levels. The sample audience, which goes through the survey, is handpicked, keeping in mind the diversity in India.
Bilimoria admits that measuring such macro economic data as an independent company is completely new to India. The Conference Board, an independent economic research agency in the U.S., has been publishing the CCI index for the U.S. since 1967. Over the years, it has become so important that the Federal Reserve looks at CCI data (in addition to other data) while deciding on interest rates. “In my earlier venture (Bilimoria was founder of Boston Analytics), several of our foreign clients wanted such data on India, but there was either no such data or very unreliable data that was available.”
BluFin Advisors India
Founder: Rashid Bilimoria
USP: Financial information company focused on launching macro-economic and financial market indices
Investors: Zodius and Anthemis Group
Even while running Boston Analytics, Bilimoria collaborated with Dr. Sam Thomas (now part of BluFin) to start measuring consumer sentiment in India. “It wasn’t the core of what we did at Boston Analytics, but it was very useful data we generated for our clients,” says Bilimoria. After selling the company, Bilimoria along with Neeraj Bhargava of Zodius, the investment firm that is focused on creating India centric digital properties, started analysing the potential of a venture such as BluFin. Bilimoria joined Zodius as entrepreneur-in-residence and set out to build the business plan for a financial information company. Anthemis Group, an investment firm that invests in companies at the intersection of finance and technology, was also roped in as an investor and BluFin was born.
Even as Bilimoria is gearing up to grow the CCI, he’s also steering BluFin to launch other products and services. In indices, the company is launching a broad market index to measure the performance of the Indian stock markets (this one is modelled along the globally renown Russell 3000) and measurement mechanism to analyse the health of various sectors. The latter, Bilimoria believes, will help individuals and institutions understand the future of specific sectors – be it automobile or banking or retail – and this information will be very useful while making investment decisions.
Additionally, BluFin is also looking to maintain a list of stocks that satisfy a particular criterion – say top 10 recession proof stocks or top 10 stocks least exposed to the European crisis. The company also wants to launch a financial education product to help people understand the finer nuances of investing in India.
About its product mix, Bilimoria says, “We want to position ourselves as economic and financial market data providers. On top of that, we’ll leverage technology to deliver all this data to our customers efficiently.”
At this stage, Bilimoria admits that his days are filled with multiple roles that he plays. “All kinds of odd things happen in the life of an entrepreneur. But overall, I am focused on three aspects – the data collection part of the effort, working with the technology team to analyse and present this data effectively, and managing the firm.” He closely works with his public relations agency and media companies to spread awareness about BluFin and the CCI. There’s also a lot of work that goes into identifying and measuring the key metrics of the business, building up the team and working with investors.
From a business model perspective, Bilimoria says his macro-economic indices are positioned as media properties. For example, a media house partnered with BluFin to create some kind of television programming around the CCI. This kind of programming attracts sponsorship (typically from banks and asset management firms) and it’s shared between the media company and BluFin. Bilimoria believes that BluFin can also offer customised indices for asset management firms and in this case, the revenue will come from licensing its index to a client company. The company wants to create communities around investing and establish a vibrant ecosystem of people and institutions around economic and financial market data.
Currently, the company employs over 20 people and is looking to grow to 35 people by the end of this calendar year. The focus over the coming few years is to build and consolidate on the next line of products and services across stock lists, stock market indices and financial education. Bilimoria is convinced that BluFin’s vision of providing data to help the investing community can transform the way investments happen in India in a positive way.
Concept in brief
BluFin was founded with the vision to empower investors – individual and institutional – with data to make better-informed investment decisions. The company’s first product is a Consumer Confidence Index (CCI) to measure consumer sentiment across India taking into consideration various factors including inflation, spending, personal expectations and employment scenario.
Additionally, the company’s featured indices can also be very useful to investors. These indices – Onion Index to measure the sentiment around onion prices, Housewives index to measure the sentiment of homemakers and Corruption index to gauge Indians’ sentiment around corruption in India can be extremely useful as well. BluFin’s product and service roadmap also includes stock lists (top 10 stocks satisfying a particular criterion, say top 10 stocks that are the most recession proof) and financial education products. We are convinced that at a macro level, India is ready for a financial information company that can measure the sentiment around economic and stock market data.