Ahluwalia Contracts (India) Limited's (NSE:AHLUCONT) market cap increased by ₹6.9b, insiders receive a 55% cut

Key Insights

• Insiders appear to have a vested interest in Ahluwalia Contracts (India)'s growth, as seen by their sizeable ownership
• The top 3 shareholders own 55% of the company
• Institutions own 26% of Ahluwalia Contracts (India)

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Every investor in Ahluwalia Contracts (India) Limited (NSE:AHLUCONT) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 55% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit ₹66b market cap following a 12% gain in the stock.

Let's delve deeper into each type of owner of Ahluwalia Contracts (India), beginning with the chart below.

View our latest analysis for Ahluwalia Contracts (India)

What Does The Institutional Ownership Tell Us About Ahluwalia Contracts (India)?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Ahluwalia Contracts (India) already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Ahluwalia Contracts (India)'s earnings history below. Of course, the future is what really matters.

Ahluwalia Contracts (India) is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Sudarshan Walia with 31% of shares outstanding. With 16% and 8.5% of the shares outstanding respectively, Bikramjit Ahluwalia and SBI Funds Management Limited are the second and third largest shareholders. Bikramjit Ahluwalia, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 55% stake.

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 Ahluwalia Contracts (India)

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.

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.

It seems that insiders own more than half the Ahluwalia Contracts (India) Limited stock. This gives them a lot of power. So they have a ₹36b stake in this ₹66b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 10% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Ahluwalia Contracts (India). 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.

Private Equity Ownership

Private equity firms hold a 8.3% stake in Ahluwalia Contracts (India). This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Ahluwalia Contracts (India) better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.