Both state or government who control a good portion of Bharat Heavy Electricals Limited (NSE:BHEL) along with institutions must be dismayed after last week's 10% decrease

Key Insights

• Bharat Heavy Electricals' 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 63% stake
• Institutional ownership in Bharat Heavy Electricals is 20%

Every investor in Bharat Heavy Electricals Limited (NSE:BHEL) should be aware of the most powerful shareholder groups. With 65% stake, state or government possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While institutions who own 20% came under pressure after market cap dropped to ₹677b last week,state or government took the most losses.

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

Check out our latest analysis for Bharat Heavy Electricals

What Does The Institutional Ownership Tell Us About Bharat Heavy Electricals?

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.

As you can see, institutional investors have a fair amount of stake in Bharat Heavy Electricals. 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 Heavy Electricals' 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 Bharat Heavy Electricals. The company's largest shareholder is India, with ownership of 63%. This implies that they have majority interest control of the future of the company. Meanwhile, the second and third largest shareholders, hold 6.7% and 2.2%, of the shares outstanding, respectively.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Bharat Heavy Electricals

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

We note our data does not show any board members 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 15% stake in Bharat Heavy Electricals. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

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.