What Kind Of Shareholders Hold The Majority In GlaxoSmithKline Pharmaceuticals Limited's (NSE:GLAXO) Shares?

A look at the shareholders of GlaxoSmithKline Pharmaceuticals Limited (NSE:GLAXO) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Companies that have been privatized tend to have low insider ownership.

With a market capitalization of ₹267b, GlaxoSmithKline Pharmaceuticals is rather large. We'd expect to see institutional investors on the register. Companies of this size are usually well known to retail investors, too. In the chart below, we can see that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about GlaxoSmithKline Pharmaceuticals.

View our latest analysis for GlaxoSmithKline Pharmaceuticals

What Does The Institutional Ownership Tell Us About GlaxoSmithKline Pharmaceuticals?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in GlaxoSmithKline Pharmaceuticals. 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. 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 GlaxoSmithKline Pharmaceuticals, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in GlaxoSmithKline Pharmaceuticals. GlaxoSmithKline plc is currently the largest shareholder, with 75% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With 5.5% and 3.5% of the shares outstanding respectively, Life Insurance Corporation of India, Asset Management Arm and Aditya Birla Sun Life AMC 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of GlaxoSmithKline Pharmaceuticals

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.

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.

Our data suggests that insiders own under 1% of GlaxoSmithKline Pharmaceuticals Limited in their own names. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own ₹946k worth of shares. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, with a 12% stake in the company, will not easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

It appears to us that public companies own 75% of GlaxoSmithKline Pharmaceuticals. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand GlaxoSmithKline Pharmaceuticals better, we need to consider many other factors. Take risks for example - GlaxoSmithKline Pharmaceuticals has 3 warning signs we think 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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