Sharda Motor Industries Limited (NSE:SHARDAMOTR) Senior Key Executive Ajay Relan's holdings dropped 13% in value as a result of the recent pullback

Key Insights

• Insiders appear to have a vested interest in Sharda Motor Industries' growth, as seen by their sizeable ownership
• Ajay Relan owns 58% of the company
• Institutional ownership in Sharda Motor Industries is 12%

A look at the shareholders of Sharda Motor Industries Limited (NSE:SHARDAMOTR) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 65% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, insiders endured the biggest losses as the stock fell by 13%.

Let's delve deeper into each type of owner of Sharda Motor Industries, beginning with the chart below.

See our latest analysis for Sharda Motor Industries

What Does The Institutional Ownership Tell Us About Sharda Motor 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.

Sharda Motor Industries already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Sharda Motor Industries' earnings history below. Of course, the future is what really matters.

Sharda Motor Industries is not owned by hedge funds. From our data, we infer that the largest shareholder is Ajay Relan (who also holds the title of Senior Key Executive) with 58% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. With 5.1% and 3.2% of the shares outstanding respectively, Aashim Relan and ICICI Prudential Asset Management Company Limited are the second and third largest shareholders. Interestingly, the second-largest shareholder, Aashim Relan is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

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. 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 Sharda Motor Industries

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

It seems that insiders own more than half the Sharda Motor Industries Limited stock. This gives them a lot of power. Given it has a market cap of ₹57b, that means they have ₹37b worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 22% 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 1 warning sign for Sharda Motor Industries that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.