Could The Shree Renuka Sugars Limited (NSE:RENUKA) Ownership Structure Tell Us Something Useful?

Every investor in Shree Renuka Sugars Limited (NSE:RENUKA) should be aware of the most powerful shareholder groups. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Companies that have been privatized tend to have low insider ownership.

Shree Renuka Sugars is not a large company by global standards. It has a market capitalization of ₹20b, which means it wouldn't have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about Shree Renuka Sugars.

Check out our latest analysis for Shree Renuka Sugars

What Does The Institutional Ownership Tell Us About Shree Renuka Sugars?

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.

We can see that Shree Renuka Sugars does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Shree Renuka Sugars' historic earnings and revenue below, but keep in mind there's always more to the story.

Shree Renuka Sugars is not owned by hedge funds. The company's largest shareholder is Wilmar International Limited, with ownership of 53%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With 9.2% and 8.5% of the shares outstanding respectively, ICICI Bank Ltd., Asset Management Arm and IDBI Asset Management Limited are the second and third largest shareholders.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Shree Renuka Sugars

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 information suggests that Shree Renuka Sugars Limited insiders own under 1% of the company. It appears that the board holds about ₹117m worth of stock. This compares to a market capitalization of ₹20b. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

With a 22% ownership, the general public have some degree of sway over Shree Renuka Sugars. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Public Company Ownership

Public companies currently own 53% of Shree Renuka Sugars stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shree Renuka Sugars better, we need to consider many other factors. Take risks for example - Shree Renuka Sugars has 2 warning signs we think you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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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