Anand Rathi Wealth Limited (NSE:ANANDRATHI) adds ₹16b in market cap and insiders have a 34% stake in that gain

Key Insights

• Anand Rathi Wealth's significant insider ownership suggests inherent interests in company's expansion
• The top 6 shareholders own 52% of the company
• 12% of Anand Rathi Wealth is held by Institutions

To get a sense of who is truly in control of Anand Rathi Wealth Limited (NSE:ANANDRATHI), it is important to understand the ownership structure of the business. With 34% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit ₹167b market cap following a 10% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Anand Rathi Wealth.

Check out our latest analysis for Anand Rathi Wealth

What Does The Institutional Ownership Tell Us About Anand Rathi Wealth?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Anand Rathi Wealth does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Anand Rathi Wealth's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Anand Rathi Wealth. Our data shows that Anand Rathi Financial Services Limited is the largest shareholder with 20% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 15% and 8.9%, of the shares outstanding, respectively. Two of the top three shareholders happen to be Top Key Executive and Member of the Board of Directors, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders. In addition, we found that Rakesh Rawal, the CEO has 2.3% of the shares allocated to their name.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Anand Rathi Wealth

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own a reasonable proportion of Anand Rathi Wealth Limited. It has a market capitalization of just ₹167b, and insiders have ₹57b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 26% stake in Anand Rathi Wealth. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 29%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Anand Rathi Wealth better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Anand Rathi Wealth you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.