Individual investors own 12% of Bank of Maharashtra (NSE:MAHABANK) shares but state or government control 80% of the company

Key Insights

• Significant control over Bank of Maharashtra by state or government implies that the general public has more power to influence management and governance-related decisions
• India owns 80% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Bank of Maharashtra (NSE:MAHABANK), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are state or government with 80% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Meanwhile, individual investors make up 12% of the company’s shareholders.

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

View our latest analysis for Bank of Maharashtra

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

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Bank of Maharashtra already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Maharashtra, (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 Maharashtra. Looking at our data, we can see that the largest shareholder is India with 80% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With 7.1% and 0.5% of the shares outstanding respectively, Life Insurance Corporation of India, Asset Management Arm and The Vanguard Group, Inc. are the second and third largest shareholders.

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 Bank of Maharashtra

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Maharashtra. Keep in mind that it's a big company, and the insiders own ₹398k worth of shares. The absolute value might be more important than the proportional share. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 12% stake in Bank of Maharashtra. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Bank of Maharashtra better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Bank of Maharashtra you should know about.

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.