Bharat Electronics Limited's (NSE:BEL) market cap touched ₹2.1t last week, benefiting both state or government who own 51% as well as institutions

Key Insights

• Bharat Electronics' significant state or government ownership suggests that the key decisions are influenced by shareholders from the larger public
• The largest shareholder of the company is India with a 51% stake
• Institutional ownership in Bharat Electronics is 30%

Every investor in Bharat Electronics Limited (NSE:BEL) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are state or government with 51% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 6.5% increase in the stock price last week, state or government profited the most, but institutions who own 30% stock also stood to gain from the increase.

Let's delve deeper into each type of owner of Bharat Electronics, beginning with the chart below.

Check out our latest analysis for Bharat Electronics

What Does The Institutional Ownership Tell Us About Bharat Electronics?

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.

As you can see, institutional investors have a fair amount of stake in Bharat Electronics. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Bharat Electronics' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Bharat Electronics. India is currently the largest shareholder, with 51% of shares outstanding. This implies that they have majority interest control of the future of the company. With 3.6% and 2.9% of the shares outstanding respectively, Nippon Life India Asset Management Limited and Kotak Mahindra Asset Management Company Limited are the second and third largest shareholders.

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 Bharat Electronics

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.

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.

Our information suggests that Bharat Electronics Limited insiders own under 1% of the company. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own ₹7.7m of stock. Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 19% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with Bharat Electronics .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.