With a 46% stake, APAR Industries Limited (NSE:APARINDS) insiders have a lot riding on the company

Key Insights

• APAR Industries' significant insider ownership suggests inherent interests in company's expansion
• The top 3 shareholders own 57% of the company
• Institutions own 25% of APAR Industries

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. And the group that holds the biggest piece of the pie are individual insiders with 46% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

So, insiders of APAR Industries have a lot at stake and every decision they make on the company’s future is important to them from a financial point of view.

In the chart below, we zoom in on the different ownership groups of APAR Industries.

See our latest analysis for APAR Industries

What Does The Institutional Ownership Tell Us About APAR Industries?

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 APAR Industries does have institutional investors; and they hold a good portion of the company's stock. 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. 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 APAR Industries' historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in APAR Industries. The company's CEO Kushal Desai is the largest shareholder 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.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of APAR Industries

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.

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 insiders own a significant proportion of APAR Industries Limited. Insiders own ₹149b worth of shares in the ₹324b company. That's quite meaningful. 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, who are usually individual investors, hold a 17% stake in APAR Industries. 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 Company Ownership

It seems that Private Companies own 12%, of the APAR Industries stock. 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. Take risks for example - APAR Industries has 3 warning signs (and 1 which is concerning) we think you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.