Retail investors who hold 28% of Titagarh Rail Systems Limited (NSE:TITAGARH) gained 4.2%, institutions profited as well

Key Insights

• The considerable ownership by retail investors in Titagarh Rail Systems indicates that they collectively have a greater say in management and business strategy
• The top 8 shareholders own 52% of the company
• Insiders have been selling lately

If you want to know who really controls Titagarh Rail Systems Limited (NSE:TITAGARH), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 28% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 4.2% increase in the stock price last week, retail investors profited the most, but institutions who own 28% stock also stood to gain from the increase.

In the chart below, we zoom in on the different ownership groups of Titagarh Rail Systems.

View our latest analysis for Titagarh Rail Systems

What Does The Institutional Ownership Tell Us About Titagarh Rail Systems?

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.

Titagarh Rail Systems already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Titagarh Rail Systems' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Titagarh Rail Systems. Our data shows that TITAGARH CAPITAL MANAGEMENT SERVICES(P) LTD is the largest shareholder with 18% of shares outstanding. With 14% and 7.5% of the shares outstanding respectively, Jagdish Chowdhary and Rashmi Chowdhary are the second and third largest shareholders. 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.

On further inspection, we found that more than half the company's shares are owned by the top 8 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Titagarh Rail Systems

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 information suggests that insiders maintain a significant holding in Titagarh Rail Systems Limited. Insiders own ₹51b worth of shares in the ₹228b company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 28% stake in Titagarh Rail Systems. 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.

Private Company Ownership

We can see that Private Companies own 22%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 3 warning signs for Titagarh Rail Systems (2 shouldn't be ignored!) that you should be aware of before investing here.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

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

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