CEO Sanjay Lodha, Netweb Technologies India Limited's (NSE:NETWEB) largest shareholder sees value of holdings go down 3.4% after recent drop

Key Insights

• Netweb Technologies India's significant insider ownership suggests inherent interests in company's expansion
• 60% of the business is held by the top 3 shareholders
• 12% of Netweb Technologies India is held by Institutions

To get a sense of who is truly in control of Netweb Technologies India Limited (NSE:NETWEB), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 75% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders as a group endured the highest losses after market cap fell by ₹4.8b.

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

See our latest analysis for Netweb Technologies India

What Does The Institutional Ownership Tell Us About Netweb Technologies India?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Netweb Technologies India. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Netweb Technologies India, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Netweb Technologies India. With a 30% stake, CEO Sanjay Lodha is the largest shareholder. The second and third largest shareholders are Vivek Lodha and Niraj Lodha, with an equal amount of shares to their name at 15%. Note that two of the top three shareholders are also Senior Key Executive and Member of the Board of Directors, respectively, once again pointing to significant ownership by company insiders.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Netweb Technologies India

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems that insiders own more than half the Netweb Technologies India Limited stock. This gives them a lot of power. That means insiders have a very meaningful ₹101b stake in this ₹134b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public-- including retail investors -- own 13% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

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

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com