Owning 33% in Balkrishna Industries Limited (NSE:BALKRISIND) means that insiders are heavily invested in the company's future

Key Insights

• Balkrishna Industries' significant insider ownership suggests inherent interests in company's expansion
• The top 2 shareholders own 53% of the company
• Institutions own 29% of Balkrishna Industries

If you want to know who really controls Balkrishna Industries Limited (NSE:BALKRISIND), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 33% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

So, insiders of Balkrishna Industries have a lot at stake and every decision they make on the company’s future is important to them from a financial point of view.

In the chart below, we zoom in on the different ownership groups of Balkrishna Industries.

Check out our latest analysis for Balkrishna Industries

What Does The Institutional Ownership Tell Us About Balkrishna Industries?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Balkrishna Industries 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. 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 Balkrishna Industries' earnings history below. Of course, the future is what really matters.

Balkrishna Industries is not owned by hedge funds. Our data suggests that Rajiv Poddar, who is also the company's Co-Chief Executive Officer, holds the most number of shares at 28%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. Meanwhile, the second and third largest shareholders, hold 25% and 4.8%, of the shares outstanding, respectively. In addition, we found that Arvind Kumar Poddar, the CEO has 3.9% of the shares allocated to their name.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 Balkrishna Industries

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 information suggests that insiders maintain a significant holding in Balkrishna Industries Limited. It is very interesting to see that insiders have a meaningful ₹175b stake in this ₹529b business. 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 12% stake in Balkrishna Industries. 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 25%, 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Balkrishna Industries better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Balkrishna Industries .

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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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.