Both private companies who control a good portion of ESAF Small Finance Bank (NSE:ESAFSFB) along with institutions must be dismayed after last week's 11% decrease

Key Insights

• ESAF Small Finance Bank's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• ESAF Financial Holdings Private Limited owns 53% of the company
• Insiders own 13% of ESAF Small Finance Bank

If you want to know who really controls ESAF Small Finance Bank (NSE:ESAFSFB), then you'll have to look at the makeup of its share registry. With 57% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 11% decrease in the stock price last week, private companies suffered the most losses, but institutions who own 17% stock also took a hit.

Let's take a closer look to see what the different types of shareholders can tell us about ESAF Small Finance Bank.

Check out our latest analysis for ESAF Small Finance Bank

What Does The Institutional Ownership Tell Us About ESAF Small Finance Bank?

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.

We can see that ESAF Small Finance Bank does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 ESAF Small Finance Bank's earnings history below. Of course, the future is what really matters.

ESAF Small Finance Bank is not owned by hedge funds. The company's largest shareholder is ESAF Financial Holdings Private Limited, with ownership of 53%. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 6.1% of the shares outstanding, followed by an ownership of 4.5% by the third-largest shareholder. Kadambelil Thomas, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of ESAF Small Finance Bank

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. 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.

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.

Our most recent data indicates that insiders own a reasonable proportion of ESAF Small Finance Bank. Insiders have a ₹1.8b stake in this ₹14b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 11% stake in ESAF Small Finance Bank. 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 57%, of the ESAF Small Finance Bank stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand ESAF Small Finance Bank better, we need to consider many other factors.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.