The recent ₹5.8b market cap decrease is likely to have disappointed insiders invested in Banco Products (India) Limited (NSE:BANCOINDIA)

Key Insights

• Banco Products (India)'s significant insider ownership suggests inherent interests in company's expansion
• Mehul Patel owns 56% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

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Every investor in Banco Products (India) Limited (NSE:BANCOINDIA) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 68% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders as a group endured the highest losses after market cap fell by ₹5.8b.

Let's take a closer look to see what the different types of shareholders can tell us about Banco Products (India).

See our latest analysis for Banco Products (India)

What Does The Institutional Ownership Tell Us About Banco Products (India)?

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.

Less than 5% of Banco Products (India) is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Banco Products (India). Mehul Patel is currently the largest shareholder, with 56% of shares outstanding. This implies that they have majority interest control of the future of the company. Samir Patel is the second largest shareholder owning 7.0% of common stock, and Hasumati Patel holds about 2.1% of the company stock.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Banco Products (India)

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

It seems that insiders own more than half the Banco Products (India) Limited stock. This gives them a lot of power. Insiders own ₹65b worth of shares in the ₹96b company. That's extraordinary! Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 29% stake in Banco Products (India). 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Banco Products (India) (of which 1 shouldn't be ignored!) you should know about.

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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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.