Following recent decline, Fiem Industries Limited's (NSE:FIEMIND) top shareholder CEO Jagjeevan Jain sees holdings value drop by 13%

By
Simply Wall St
Published
February 25, 2022
NSEI:FIEMIND
Source: Shutterstock

If you want to know who really controls Fiem Industries Limited (NSE:FIEMIND), 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 66% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, insiders endured the biggest losses as the stock fell by 13%.

Let's delve deeper into each type of owner of Fiem Industries, beginning with the chart below.

See our latest analysis for Fiem Industries

ownership-breakdown
NSEI:FIEMIND Ownership Breakdown February 25th 2022

What Does The Institutional Ownership Tell Us About Fiem Industries?

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.

Institutions have a very small stake in Fiem Industries. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. 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.

earnings-and-revenue-growth
NSEI:FIEMIND Earnings and Revenue Growth February 25th 2022

Fiem Industries is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Jagjeevan Jain with 24% of shares outstanding. For context, the second largest shareholder holds about 23% of the shares outstanding, followed by an ownership of 12% by the third-largest shareholder. Interestingly, the second and third-largest shareholders also happen to be the Senior Key Executive and Member of the Board of Directors, respectively. This once again signifies considerable insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 Fiem Industries

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

It seems that insiders own more than half the Fiem Industries Limited stock. This gives them a lot of power. Given it has a market cap of ₹13b, that means they have ₹8.3b worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 24% stake in Fiem Industries. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 7.2% stake in Fiem Industries. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Fiem Industries better, we need to consider many other factors. Take risks for example - Fiem Industries has 2 warning signs we think you should be aware of.

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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