Private companies who have a significant stake must be disappointed along with institutions after Samvardhana Motherson International Limited's (NSE:MOTHERSON) market cap dropped by ₹32b

Key Insights

• Samvardhana Motherson International's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 55% of the business is held by the top 5 shareholders
• Insider ownership in Samvardhana Motherson International is 14%

To get a sense of who is truly in control of Samvardhana Motherson International Limited (NSE:MOTHERSON), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private companies with 35% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While institutions who own 24% came under pressure after market cap dropped to ₹963b last week,private companies took the most losses.

Let's delve deeper into each type of owner of Samvardhana Motherson International, beginning with the chart below.

View our latest analysis for Samvardhana Motherson International

What Does The Institutional Ownership Tell Us About Samvardhana Motherson International?

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.

We can see that Samvardhana Motherson International does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Samvardhana Motherson International's earnings history below. Of course, the future is what really matters.

Samvardhana Motherson International is not owned by hedge funds. Sehgals Family Trust is currently the company's largest shareholder with 13% of shares outstanding. With 12% and 12% of the shares outstanding respectively, Vivek Sehgal and Renu Sehgal Trust are the second and third largest shareholders.

Our research also brought to light the fact that roughly 55% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Samvardhana Motherson International

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

Our information suggests that insiders maintain a significant holding in Samvardhana Motherson International Limited. It has a market capitalization of just ₹963b, and insiders have ₹131b worth of shares in their own names. That's quite significant. 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-- including retail investors -- own 18% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 35%, of the company's shares. 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

It appears to us that public companies own 9.5% of Samvardhana Motherson International. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Samvardhana Motherson International has 1 warning sign we think you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.