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Alt DRX is a digital platform where Capital Instruments issued by property owning SPVs (i.e., LLP's Partnership Rights and LLP's Partner's Loan / Tokenised Loan Units) are listed for KYC whitelisted users to subscribe. Alt DRX merely acts as a digital broker for such transactions. Investors / Users are hereby informed that
An Algorithmic Daily Market Price (DMP) Model For ALT.SQFTs (Property Tokens) That are Issued by Property Owning SPVs which are Listed and Traded on the Alt DRX Platform (www.altdrx.com) by KYC Whitelisted Users
Each Property Investment Opportunity that is listed on the Alt DRX Platform is designed to be a combination of multiple real estate units that are sequentially purchased and managed by a single Special Purpose Vehicle (an LLP). The LLP issues Capital Instruments (i.e., Partners Capital & Loan Units) to its Partners against capital contributed by them in order to fund property purchases by the LLP. Property Tokens traded on the Alt DRX Platform are merely digital representations of the actual Loan Units issued by the LLP to its partners, which are then at the discretion of the Partners offered for sale to KYC whitelisted users of the Alt DRX Platform. So, trading a Property Token means the transfer of an LLP issue loan unit from one user to another. Alt DRX in such cases acts as a Digital Broker of its users. At this point of time there is no viable method to value the underlying properties held by the SPV / LLP on a real time daily basis, based on actual property transactions in the market. Hence in the absence of such a method, an algorithmic alternate method has been developed in-order to determine an indicative DMP of Property Tokens. The purpose of the algorithmic DMP is to give Users the convenience and choice for determining the price at which they wish to buy or sell a specific property token in the secondary market (TradeX) on the Alt DRX Platform. The Algorithm Method is detailed below.
The Algorithmic DMP formula is essentially a cost-of-capital identity applied to a real-estate-backed instrument & is conceptually similar to a risk-adjusted accrual-pricing model used for illiquid instruments, with these governing principles
The algorithmic formula to arrive at the DMP shall be disclosed on the Alt DRX Platform. Any changes to it shall also result in the updated being disclosed on the Alt DRX Platform.
Alt DRX Platform's users shall not be compelled to use the Algorithmic DMP for their Property Token Trades. Instead, they will be offered a choice while punching their Buy / Sell orders, to either choose the displayed DMP (referred hereinafter as Market Price or DMP or Market Order or Daily Market Price) or alternative punch a price of their choice within certain prudential limits (referred hereinafter as Limit Price or Limit Order)
The Algorithmic Daily Market Price shall be reset periodically using traditional valuation of the underlying properties held by the LLP using the services of accredited valuers. The first such reset shall be initiated post completion of 4 years from the date the SPV / LLP acquired the first asset or upon it acquiring assets cumulatively valued at Rs 50 crores, whichever is earlier.
Users are free to punch their own price for their Property Token orders by using the Limit Price option. However, to avoid arbitrary price speculation & the preference for simple rules considering the nascent stage of Alt DRX platform, the following restrictions are imposed on Limit Price orders
DMP is calculated every day. The parameters below are updated once every month, unless a periodic reset is triggered.
| Parameter Name | Parameter | Description Remarks |
|---|---|---|
Risk-Free Return RFR | Market Determined | 10-year Government of India Securities (GSec) Yields |
Risk Spread RS | 4.0% | General market expectations on additional returns over & above RFR, while investing into real estate |
Expected Confidence Factor ECF | Platform Determined Range: 75% to 125% | Master Property Manager's internal confidence level on the RS Parameter, based on the current asset quality and demand outlook in the market |
Projected Rental Yield PRY | Market Determined | Actual average rental yield per Alt.SQFT (Property Token) of prior period shall be assumed to be constant for the oncoming period too. In case of new opportunities the Master Property Manager's internal expectations on rental yield per Alt.SQFT (Property Token) based on prior distributions and general market outlook shall be taken into consideration |
User Supply Demand Factor USDF | User Determined Range: 95% to 105% | Adjustment factor based on the last 6 months secondary market (TradeX) transaction value on the Alt DRX Platform, excluding orders placed by Alt DRX & its affiliates.
If the Opportunity SDF is
Only Investment Opportunities which have a vintage on the Platform for beyond 6 months in the TradeX window will be subject to this parameter. |
Bid Offer Spread BOS | Platform Determined 3.0% | This is the difference between the DMP applicable to Buy & Sell Orders, which by design discourages short-term trading in Property Tokens and encourages long-hold strategy by users. |
This Algorithmic Daily Market Price method shall be periodically reviewed and updated when & where needed based on data insights, user feedback, expert feedback, and statutory obligations.
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Disclaimer - *Alt DRX is a platform facilitating access to real estate investment opportunities. We are not a registered broker-dealer or investment advisor. We do not provide personalized investment advice, endorsements, analyses, or recommendations regarding specific investments or securities. Investment decisions are ultimately your responsibility. We encourage you to conduct thorough due diligence, not rely solely on the information presented on this platform, and consider seeking professional advice from a financial advisor, attorney, or other qualified professional to understand and assess the risks associated with any investment opportunity. Alt DRX does not guarantee any specific investment performance, outcome, liquidity or return of capital for any investment opportunity listed on this platform.