Painful week for state or government invested in Bank of Baroda Limited (NSE:BANKBARODA) after 3.4% drop, institutions also suffered losses

Key Insights

• The considerable ownership by state or government in Bank of Baroda indicates that they collectively have a greater say in management and business strategy
• India owns 64% of the company
• Institutional ownership in Bank of Baroda is 25%

Every investor in Bank of Baroda Limited (NSE:BANKBARODA) should be aware of the most powerful shareholder groups. We can see that state or government own the lion's share in the company with 64% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of state or government took a hit after last week’s 3.4% price drop, institutions with their 25% holdings also suffered.

In the chart below, we zoom in on the different ownership groups of Bank of Baroda.

See our latest analysis for Bank of Baroda

What Does The Institutional Ownership Tell Us About Bank of Baroda?

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.

Bank of Baroda 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Bank of Baroda, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Bank of Baroda. India is currently the largest shareholder, with 64% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. In comparison, the second and third largest shareholders hold about 6.0% and 2.2% of the stock.

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 Bank of Baroda

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

Our most recent data indicates that insiders own less than 1% of Bank of Baroda Limited. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own ₹3.5k worth of shares. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

With a 11% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Bank of Baroda. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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. For example, we've discovered 1 warning sign for Bank of Baroda that you should be aware of before investing here.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.