JK Tyre & Industries Limited's (NSE:JKTYRE) market cap surged ₹5.1b last week, public companies who have a lot riding on the company were rewarded

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 52% ownership
• Institutional ownership in JK Tyre & Industries is 18%

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A look at the shareholders of JK Tyre & Industries Limited (NSE:JKTYRE) can tell us which group is most powerful. The group holding the most number of shares in the company, around 48% to be precise, is public companies. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, public companies benefitted the most after the company's market cap rose by ₹5.1b last week.

Let's take a closer look to see what the different types of shareholders can tell us about JK Tyre & Industries.

See our latest analysis for JK Tyre & Industries

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

JK Tyre & Industries already has institutions on the share registry. Indeed, they own a respectable stake in 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see JK Tyre & Industries' historic earnings and revenue below, but keep in mind there's always more to the story.

JK Tyre & Industries is not owned by hedge funds. The company's largest shareholder is Bengal & Assam Company Limited, with ownership of 48%. International Finance Corporation is the second largest shareholder owning 4.9% of common stock, and HDFC Asset Management Company Limited holds about 1.9% of the company stock. Furthermore, CEO Raghupati Singhania is the owner of 0.7% of the company's shares.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

We can report that insiders do own shares in JK Tyre & Industries Limited. This is a big company, so it is good to see this level of alignment. Insiders own ₹4.1b worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 25% stake in the company, and hence can't easily be ignored. 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

It seems that Private Companies own 5.3%, of the JK Tyre & Industries stock. 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

Public companies currently own 48% of JK Tyre & Industries stock. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - JK Tyre & Industries has 3 warning signs (and 1 which can't be ignored) we think you should know about.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.