Bharat Dynamics Limited (NSE:BDL) most popular amongst state or government who own 75% of the shares, institutions hold 14%

Key Insights

• Bharat Dynamics' significant state or government ownership suggests that the key decisions are influenced by shareholders from the larger public
• 75% of the company is held by a single shareholder (India)
• Institutions own 14% of Bharat Dynamics

A look at the shareholders of Bharat Dynamics Limited (NSE:BDL) can tell us which group is most powerful. We can see that state or government own the lion's share in the company with 75% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Meanwhile, institutions make up 14% of the company’s shareholders. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.

Let's take a closer look to see what the different types of shareholders can tell us about Bharat Dynamics.

See our latest analysis for Bharat Dynamics

What Does The Institutional Ownership Tell Us About Bharat Dynamics?

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 Bharat Dynamics 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Bharat Dynamics' historic earnings and revenue below, but keep in mind there's always more to the story.

Bharat Dynamics is not owned by hedge funds. The company's largest shareholder is India, with ownership of 75%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. HDFC Asset Management Company Limited is the second largest shareholder owning 3.0% of common stock, and Max Life Insurance Company Limited, Asset Management Arm holds about 2.3% of the company stock.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Bharat Dynamics

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our data suggests that insiders own under 1% of Bharat Dynamics Limited in their own names. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around ₹1.1b worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 10% stake in Bharat Dynamics. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 1 warning sign for Bharat Dynamics that you should be aware of before investing here.

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.