Individual investors are Amara Raja Energy & Mobility Limited's (NSE:ARE&M) biggest owners and were hit after market cap dropped ₹11b

Key Insights

• The considerable ownership by individual investors in Amara Raja Energy & Mobility indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 4 shareholders
• 23% of Amara Raja Energy & Mobility is held by Institutions

Every investor in Amara Raja Energy & Mobility Limited (NSE:ARE&M) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 35% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 4.0% decline in share price, individual investors suffered the most losses.

Let's delve deeper into each type of owner of Amara Raja Energy & Mobility, beginning with the chart below.

Check out our latest analysis for Amara Raja Energy & Mobility

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

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.

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.

Hedge funds don't have many shares in Amara Raja Energy & Mobility. Our data shows that RNGalla Family Private Limited is the largest shareholder with 33% of shares outstanding. For context, the second largest shareholder holds about 8.8% of the shares outstanding, followed by an ownership of 6.0% by the third-largest shareholder.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

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

With a 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Amara Raja Energy & Mobility. 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

With a stake of 8.8%, private equity firms could influence the Amara Raja Energy & Mobility board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

It seems that Private Companies own 33%, of the Amara Raja Energy & Mobility stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Amara Raja Energy & Mobility better, we need to consider many other factors. To that end, you should be aware of the 3 warning signs we've spotted with Amara Raja Energy & Mobility .

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.