Insiders were the key beneficiaries as Ahluwalia Contracts (India) Limited's (NSE:AHLUCONT) market cap rises to ₹75b

Key Insights

• Ahluwalia Contracts (India)'s significant insider ownership suggests inherent interests in company's expansion
• The top 3 shareholders own 56% of the company
• Institutional ownership in Ahluwalia Contracts (India) is 25%

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If you want to know who really controls Ahluwalia Contracts (India) Limited (NSE:AHLUCONT), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 55% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by ₹11b last week.

Let's take a closer look to see what the different types of shareholders can tell us about Ahluwalia Contracts (India).

Check out our latest analysis for Ahluwalia Contracts (India)

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

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.

We can see that Ahluwalia Contracts (India) does have institutional investors; and they hold a good portion of the company's stock. 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 Ahluwalia Contracts (India), (below). Of course, keep in mind that there are other factors to consider, too.

Ahluwalia Contracts (India) is not owned by hedge funds. Sudarshan Walia is currently the largest shareholder, with 31% of shares outstanding. For context, the second largest shareholder holds about 16% of the shares outstanding, followed by an ownership of 9.2% by the third-largest shareholder. 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 56% stake.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Ahluwalia Contracts (India)

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.

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.

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 ₹41b stake in this ₹75b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 10% stake in the company, and hence can't easily be ignored. 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.

Private Equity Ownership

With a stake of 9.2%, private equity firms could influence the Ahluwalia Contracts (India) board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Ahluwalia Contracts (India) you should know about.

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.