What You Need To Know About Gujarat Mineral Development Corporation Limited's (NSE:GMDCLTD) Investor Composition

Every investor in Gujarat Mineral Development Corporation Limited (NSE:GMDCLTD) 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 used to be publicly owned tend to have lower insider ownership.

Gujarat Mineral Development is not a large company by global standards. It has a market capitalization of ₹13b, 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 Gujarat Mineral Development.

Check out our latest analysis for Gujarat Mineral Development

What Does The Institutional Ownership Tell Us About Gujarat Mineral Development?

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.

Gujarat Mineral Development 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 Gujarat Mineral Development's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Gujarat Mineral Development. Our data shows that Government of Gujarat is the largest shareholder with 74% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. For context, the second largest shareholder holds about 2.9% of the shares outstanding, followed by an ownership of 2.6% by the third-largest shareholder.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Gujarat Mineral Development

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.

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 most recent data indicates that insiders own less than 1% of Gujarat Mineral Development Corporation Limited. It seems the board members have no more than ₹73m worth of shares in the ₹13b company. I generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public holds a 16% stake in Gujarat Mineral Development. 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. Be aware that Gujarat Mineral Development is showing 2 warning signs in our investment analysis , and 1 of those is potentially serious...

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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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