How Many The Jammu and Kashmir Bank Limited (NSE:J&KBANK) Shares Do Institutions Own?

If you want to know who really controls The Jammu and Kashmir Bank Limited (NSE:J&KBANK), then you'll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. We also tend to see lower insider ownership in companies that were previously publicly owned.

Jammu and Kashmir Bank is a smaller company with a market capitalization of ₹17b, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about Jammu and Kashmir Bank.

Check out our latest analysis for Jammu and Kashmir Bank

What Does The Institutional Ownership Tell Us About Jammu and Kashmir 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.

As you can see, institutional investors have a fair amount of stake in Jammu and Kashmir Bank. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Jammu and Kashmir Bank's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Jammu and Kashmir Bank. State of Jammu and Kashmir is currently the company's largest shareholder with 68% of shares outstanding. This implies that they have majority interest control of the future of the company. Meanwhile, the second and third largest shareholders, hold 3.8% and 2.5%, of the shares outstanding, respectively.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Jammu and Kashmir Bank

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.

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 less than 1% of The Jammu and Kashmir Bank Limited. It seems the board members have no more than ₹260k worth of shares in the ₹17b company. I generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

With a 19% ownership, the general public have some degree of sway over Jammu and Kashmir Bank. 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 Jammu and Kashmir Bank better, we need to consider many other factors. For instance, we've identified 3 warning signs for Jammu and Kashmir Bank (1 can't be ignored) that you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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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