JK Tyre & Industries Limited's (NSE:JKTYRE) largest shareholders are public companies who were rewarded as market cap surged ₹8.6b last week

Key Insights

• The considerable ownership by public companies in JK Tyre & Industries indicates that they collectively have a greater say in management and business strategy
• A total of 2 investors have a majority stake in the company with 53% ownership
• 12% of JK Tyre & Industries is held by Institutions

If you want to know who really controls JK Tyre & Industries Limited (NSE:JKTYRE), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 50% to be precise, is public companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, public companies were the biggest beneficiaries of last week’s 8.8% gain.

In the chart below, we zoom in on the different ownership groups of JK Tyre & Industries.

View our latest analysis for JK Tyre & Industries

What Does The Institutional Ownership Tell Us About JK Tyre & 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.

JK Tyre & Industries 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. 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 JK Tyre & Industries' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in JK Tyre & Industries. The company's largest shareholder is Bengal & Assam Company Limited, with ownership of 50%. With 3.5% and 3.4% of the shares outstanding respectively, Sachin Bansal and Navodya Enterprises are the second and third largest shareholders. In addition, we found that Raghupati Singhania, the CEO has 0.7% 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 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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of JK Tyre & Industries

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Shareholders would probably be interested to learn that insiders own shares in JK Tyre & Industries Limited. The insiders have a meaningful stake worth ₹8.7b. Most would see this as a real positive. It is good to see this level of investment by insiders. 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 19% stake in JK Tyre & Industries. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 9.8%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Public Company Ownership

We can see that public companies hold 50% of the JK Tyre & Industries shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with JK Tyre & Industries , and understanding them should be part of your investment process.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.