Insiders the biggest winners as NDR Auto Components Limited's (NSE:NDRAUTO) market cap rises to ₹17b

Key Insights

• Insiders appear to have a vested interest in NDR Auto Components' growth, as seen by their sizeable ownership
• 61% of the business is held by the top 2 shareholders
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

A look at the shareholders of NDR Auto Components Limited (NSE:NDRAUTO) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 76% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit ₹17b market cap following a 13% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about NDR Auto Components.

View our latest analysis for NDR Auto Components

What Does The Lack Of Institutional Ownership Tell Us About NDR Auto Components?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. NDR Auto Components' earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

NDR Auto Components is not owned by hedge funds. Rohit Relan is currently the largest shareholder, with 48% of shares outstanding. Ajay Relan is the second largest shareholder owning 13% of common stock, and Sharda Relan holds about 4.1% of the company stock.

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.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of NDR Auto Components

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. 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.

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.

Our information suggests that insiders own more than half of NDR Auto Components Limited. This gives them effective control of the company. That means they own ₹13b worth of shares in the ₹17b company. That's quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 24% 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand NDR Auto Components better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for NDR Auto Components you should know about.

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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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.