Stock Analysis

With 46% ownership in APAR Industries Limited (NSE:APARINDS), insiders continue to have the largest holding even though they have sold shares recently

NSEI:APARINDS
Source: Shutterstock

Key Insights

  • Insiders appear to have a vested interest in APAR Industries' growth, as seen by their sizeable ownership
  • 57% of the business is held by the top 3 shareholders
  • Insiders have sold recently

To get a sense of who is truly in control of APAR Industries Limited (NSE:APARINDS), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 46% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Even though insiders have sold shares recently, the group owns the most numbers of shares in the company.

Let's take a closer look to see what the different types of shareholders can tell us about APAR Industries.

See our latest analysis for APAR Industries

ownership-breakdown
NSEI:APARINDS Ownership Breakdown March 1st 2024

What Does The Institutional Ownership Tell Us About APAR Industries?

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.

APAR Industries already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 APAR Industries, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NSEI:APARINDS Earnings and Revenue Growth March 1st 2024

Hedge funds don't have many shares in APAR Industries. Looking at our data, we can see that the largest shareholder is the CEO Kushal Desai with 23% of shares outstanding. With 23% and 11% of the shares outstanding respectively, Chaitanya Desai and Maithili N Desai Family Private Trust are the second and third largest shareholders. Interestingly, the second-largest shareholder, Chaitanya Desai is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of APAR Industries

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems insiders own a significant proportion of APAR Industries Limited. Insiders own ₹116b worth of shares in the ₹251b company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 17% ownership, the general public, mostly comprising of individual investors, have some degree of sway over APAR Industries. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 12%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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. Case in point: We've spotted 2 warning signs for APAR Industries you should be aware of.

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.