Could The Automotive Axles Limited (NSE:AUTOAXLES) Ownership Structure Tell Us Something Useful?

If you want to know who really controls Automotive Axles Limited (NSE:AUTOAXLES), then you’ll have to look at the makeup of its share registry. 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.

Automotive Axles is a smaller company with a market capitalization of ₹12b, so it may still be flying under the radar of many institutional investors. In the chart below below, we can see that institutions are noticeable on the share registry. Let’s delve deeper into each type of owner, to discover more about AUTOAXLES.

View our latest analysis for Automotive Axles

NSEI:AUTOAXLES Ownership Summary, November 20th 2019
NSEI:AUTOAXLES Ownership Summary, November 20th 2019

What Does The Institutional Ownership Tell Us About Automotive Axles?

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.

Automotive Axles already has institutions on the share registry. Indeed, they own 15% of the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at Automotive Axles’s earnings history, below. Of course, the future is what really matters.

NSEI:AUTOAXLES Income Statement, November 20th 2019
NSEI:AUTOAXLES Income Statement, November 20th 2019

Hedge funds don’t have many shares in Automotive Axles. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Automotive Axles

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 Automotive Axles Limited insiders own under 1% of the company. However, it’s possible that insiders might have an indirect interest through a more complex structure. It has a market capitalization of just ₹12b, and the board has only ₹58m worth of shares in their own names. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 13% ownership, the general public have some degree of sway over AUTOAXLES. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 36%, of the company’s shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

It appears to us that public companies own 36% of AUTOAXLES. We can’t be certain, but this is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand Automotive Axles better, we need to consider many other factors.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.