Public companies invested in JK Tyre & Industries Limited (NSE:JKTYRE) copped the brunt of last week's ₹5.4b market cap decline

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
• 52% of the business is held by the top 2 shareholders
• Institutions own 18% of JK Tyre & Industries

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. And the group that holds the biggest piece of the pie are public companies with 47% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to ₹102b last week, public companies would have faced the highest losses than any other shareholder groups of the company.

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?

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.

As you can see, institutional investors have a fair amount of stake in JK Tyre & Industries. 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.

JK Tyre & Industries is not owned by hedge funds. Bengal & Assam Company Limited is currently the largest shareholder, with 47% of shares outstanding. For context, the second largest shareholder holds about 4.9% of the shares outstanding, followed by an ownership of 3.2% by the third-largest shareholder. Additionally, the company's CEO Raghupati Singhania directly holds 0.7% of the total shares outstanding.

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 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 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.

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. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around ₹6.6b worth of shares (at current prices). 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 18% stake in JK Tyre & Industries. 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.

Private Company Ownership

It seems that Private Companies own 9.3%, of the JK Tyre & Industries stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Public Company Ownership

It appears to us that public companies own 47% of JK Tyre & Industries. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand JK Tyre & Industries better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for JK Tyre & Industries (of which 1 shouldn't be ignored!) you should know about.

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.