Amara Raja Energy & Mobility Limited's (NSE:ARE&M) largest shareholders are retail investors with 36% ownership, private companies own 33%

Key Insights

• Amara Raja Energy & Mobility's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 52% of the business is held by the top 5 shareholders
• 22% of Amara Raja Energy & Mobility is held by Institutions

If you want to know who really controls Amara Raja Energy & Mobility Limited (NSE:ARE&M), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 36% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Meanwhile, private companies make up 33% of the company’s shareholders.

In the chart below, we zoom in on the different ownership groups of Amara Raja Energy & Mobility.

See our latest analysis for Amara Raja Energy & Mobility

What Does The Institutional Ownership Tell Us About Amara Raja Energy & Mobility?

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.

Amara Raja Energy & Mobility 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 Amara Raja Energy & Mobility, (below). Of course, keep in mind that there are other factors to consider, too.

Amara Raja Energy & Mobility is not owned by hedge funds. The company's largest shareholder is RNGalla Family Private Limited, with ownership of 33%. Meanwhile, the second and third largest shareholders, hold 8.8% and 6.3%, of the shares outstanding, respectively.

On looking further, we found that 52% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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 Amara Raja Energy & Mobility

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.

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.

Our data cannot confirm that board members are holding shares personally. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.

General Public Ownership

The general public, who are usually individual investors, hold a 36% stake in Amara Raja Energy & Mobility. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With a stake of 8.8%, private equity firms could influence the Amara Raja Energy & Mobility 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.

Private Company Ownership

It seems that Private Companies own 33%, of the Amara Raja Energy & Mobility stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Amara Raja Energy & Mobility 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.