What Type Of Shareholders Make Up Yes Bank Limited's (NSE:YESBANK) Share Registry?

By
Simply Wall St
Published
January 21, 2022
NSEI:YESBANK
Source: Shutterstock

Every investor in Yes Bank Limited (NSE:YESBANK) should be aware of the most powerful shareholder groups. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that have been privatized tend to have low insider ownership.

Yes Bank is a pretty big company. It has a market capitalization of ₹346b. Normally institutions would own a significant portion of a company this size. Taking a look at our data on the ownership groups (below), it seems that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about Yes Bank.

Check out our latest analysis for Yes Bank

ownership-breakdown
NSEI:YESBANK Ownership Breakdown January 21st 2022

What Does The Institutional Ownership Tell Us About Yes 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.

Yes 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. 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 Yes Bank, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NSEI:YESBANK Earnings and Revenue Growth January 21st 2022

We note that hedge funds don't have a meaningful investment in Yes Bank. State Bank of India is currently the largest shareholder, with 30% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.0% and 4.0%, of the shares outstanding, respectively.

We did some more digging and found that 9 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 Yes Bank

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 less than 1% of Yes Bank Limited. Keep in mind that it's a big company, and the insiders own ₹2.2b worth of shares. The absolute value might be more important than the proportional share. 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

The general public, who are usually individual investors, hold a 42% stake in Yes 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.

Public Company Ownership

Public companies currently own 45% of Yes Bank stock. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Yes Bank better, we need to consider many other factors. For example, we've discovered 1 warning sign for Yes Bank that you should be aware of before investing here.

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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