State or government are Punjab National Bank's (NSE:PNB) biggest owners and were rewarded after market cap rose by ₹73b last week

Key Insights

• Punjab National Bank's significant state or government ownership suggests that the key decisions are influenced by shareholders from the larger public
• 70% of the company is held by a single shareholder (India)
• Institutional ownership in Punjab National Bank is 15%

A look at the shareholders of Punjab National Bank (NSE:PNB) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are state or government with 70% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, state or government were the biggest beneficiaries of last week’s 6.7% gain.

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

View our latest analysis for Punjab National Bank

What Does The Institutional Ownership Tell Us About Punjab National 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 Punjab National Bank. 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 Punjab National Bank's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Punjab National Bank. Our data shows that India is the largest shareholder with 70% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. For context, the second largest shareholder holds about 7.9% of the shares outstanding, followed by an ownership of 1.0% by the third-largest shareholder.

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 Punjab National Bank

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 Punjab National Bank. 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 ₹2.5m worth of shares. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

With a 15% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Punjab National 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.

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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Punjab National Bank , and understanding them should be part of your investment process.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.