Ujjivan Small Finance Bank Limited's (NSE:UJJIVANSFB) market cap surged ₹5.1b last week, public companies who have a lot riding on the company were rewarded

Key Insights

• Significant control over Ujjivan Small Finance Bank by public companies implies that the general public has more power to influence management and governance-related decisions
• Ujjivan Financial Services Limited owns 74% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Ujjivan Small Finance Bank Limited (NSE:UJJIVANSFB) should be aware of the most powerful shareholder groups. With 74% stake, public companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, public companies benefitted the most after the company's market cap rose by ₹5.1b last week.

Let's delve deeper into each type of owner of Ujjivan Small Finance Bank, beginning with the chart below.

View our latest analysis for Ujjivan Small Finance Bank

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

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.

Ujjivan Small Finance Bank 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. 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 Ujjivan Small Finance Bank's historic earnings and revenue below, but keep in mind there's always more to the story.

Ujjivan Small Finance Bank is not owned by hedge funds. Our data shows that Ujjivan Financial Services Limited is the largest shareholder with 74% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. For context, the second largest shareholder holds about 2.1% of the shares outstanding, followed by an ownership of 1.7% by the third-largest shareholder.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 Ujjivan Small Finance Bank

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 data suggests that insiders own under 1% of Ujjivan Small Finance Bank Limited in their own names. It seems the board members have no more than ₹126m worth of shares in the ₹60b company. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

With a 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Ujjivan Small Finance Bank. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

We can see that public companies hold 74% of the Ujjivan Small Finance Bank shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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. Be aware that Ujjivan Small Finance Bank is showing 3 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.