The Indian Institute of Management Ahmedabad (IIMA), a premier global management institute, in collaboration with India’s first agri-land marketplace SFarmsIndia has announced the launch of IIMA-SFarmsIndia Agri Land Price Index (ISALPI), a first-of-its-kind land price index that will record and present ‘quality controlled’ data of prices of agricultural land across the country. This index is particularly important in terms of benchmarking land prices in rural and semi-urban areas. In such a case, the index will serve as a reliable source that will signal potential conversion of agricultural land into real estate.
Unlike financial assets, developing an index for land parcels is a complex task because of visible price differences in different listings caused by a slew of factors including the market wide supply-demand factors. The method adopted for the preparation of ISALPI addresses these disparities and ensures accuracy. ISALPI has been put together using the regression-based hedonic pricing methods.
The Misra Centre for Financial Markets and Economy at IIMA, under which this index is being launched, will be hosting this index on its official website. The Centre is committed to creating and disseminating new knowledge and insights about various facets of the Indian financial markets and economy. This index will be hosted as a part of the Centre’s website: https://www.iima.ac.in/web/areas-and-centres/research-centres/misra-centre-for-financial-markets-and-economy/isalpi
Currently ISALPI is based on land listing data from six states: Andhra Pradesh, Karnataka, Maharashtra, Tamil Nadu, Telangana, and Uttar Pradesh. With the arrival of more data from other states of India, the index could be more valuable in two ways. First, it will offer superior representation of the national context. Second, it will offer a more granular index at regional levels.
In addition, this index can greatly benefit stakeholders across the spectrum including policy makers, local governments, environmentalists, investors, real estate developers and financiers. For instance, the index can be used by local governments to compensate the people who lose land for highway expansion.
Further elaborating on the utility of the index, project lead and associate professor of Real Estate Finance at IIMA, Dr Prashant Das, said, “Investors could use this information to assess the historical risk and return in the past and predict these metrics for the future to decide on their investment positions. Fund managers and producers could use this information to broadly benchmark their own performance . Financiers and insurers could use this information to assess the risk in the company related to the asset class reflected in the index. Researchers could use this information to study how economic events and factors are associated with price movements in a specific asset class. Policy makers (e.g. the Central bank) may use it to modulate their policies.”
The collaboration with IIMA to develop an Agri-land price index (ISALPI) is an important step in this regard.”
The Misra Centre for Financial Markets and Economy at IIMA is a Centre of Excellence, conducting research on the Financial Markets and Economy in India. This Centre is expected to provide impetus for focused research and teaching related to financial markets within the overall economic framework.
About IIM Ahmedabad
The Indian Institute of Management Ahmedabad (IIMA) is a premier, global management Institute that is at the forefront of promoting excellence in the field of management education. Over the 60 years of its existence, it has been acknowledged for its exemplary contributions to scholarship, practice and policy through its distinctive teaching, high-quality research, nurturing future leaders, supporting industry, government, social enterprise and creating a progressive impact on society.
IIMA was founded as an innovative initiative by the Government, industry and international academia in 1961. Since then it has been consolidating its global footprint and today it has a network with over 80 top international institutions and a presence in Dubai. Its eminent faculty members and 40,000 alumni, who are at the helm of influential positions in all walks of life also contribute to its global recognition.
Over the years, IIMA’s academically superior, market-driven, and socially impactful programmes, have earned high reputation and acclaim globally. It became the first Indian institution to receive international accreditation from EQUIS. The renowned flagship two-year Post Graduate Programme in Management (PGP) is ranked 20th in the FT Master in Management Ranking 2020 and the one-year Post Graduate Programme in Management for Executives (PGPX) has been ranked 48th in the FT Global MBA rankings 2021. The institute also is placed first in the Government of India’s National Institutional Ranking Framework (NIRF), India Rankings 2020. IIMA offers consultancy services and more than 200 curated executive education programmes in customized, blended, and open enrolment formats for a diverse audience comprising of business leaders, policymakers, industry professionals, academicians, government officials, armed forces personnel, agri-business and other niche sector specialists and entrepreneurs. To know more about IIMA, please visit: https://www.iima.ac.in/
About SFarmsIndia and Its Data (www.sfarmsindia.com)
SFarmsIndia is an Agri-land discovery platform, connecting prospective buyers and sellers. It is one of the very few platforms in India focusing exclusively on agricultural land listings. With more than 25,000 registered buyers and sellers, the platform currently offers more than 7000 land listings. SFarmsIndia has been successful in eliminating middlemen, bringing in price transparency and expanding the prospect set for the rural sellers. With more than 15% month-on-month growth in listings, SFarmsIndia is expanding to more geographies (states) and new product offerings (APCs & Food Park Lands, Small Farms, etc).
SFarmsIndia follows a streamlined data collection process with standardised data elements. As soon as a prospective seller submits a listing, our customer service executive contacts the seller and verifies the submitted information. The fields collected include but not limited to area (in acres), price per acre, location (latitude & longitude), state, district, pincode, seller/buyer identity information, etc. Unlike other peer platforms, SFarmsIndia doesn’t entertain listings from middlemen, which is aimed to preserving price transparency. SFarmsIndia also has a network of freelancers in each district who source genuine listings from rural areas on to the platform. Hence, the ask prices listed on the platform are close to the final transaction prices although SFarmsIndia doesn’t currently track the transaction bids. SFarmsIndia has a strong focus on data warehousing and mining aimed at bringing cutting-edge real-estate domain specific AI capabilities to the market. The collaboration with IIMA to develop an Agri-land price index (ISALPI) is an important step in this regard.
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