Institutions profited after Bharat Heavy Electricals Limited's (NSE:BHEL) market cap rose ₹75b last week but state or government profited the most

Key Insights

• Significant control over Bharat Heavy Electricals by state or government implies that the general public has more power to influence management and governance-related decisions
• The largest shareholder of the company is India with a 63% stake
• 20% of Bharat Heavy Electricals is held by Institutions

A look at the shareholders of Bharat Heavy Electricals Limited (NSE:BHEL) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are state or government with 65% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 8.0% increase in the stock price last week, state or government profited the most, but institutions who own 20% stock also stood to gain from the increase.

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.

Bharat Heavy Electricals already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Bharat Heavy Electricals' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Bharat Heavy Electricals. India is currently the company's largest shareholder with 63% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Meanwhile, the second and third largest shareholders, hold 7.3% and 2.2%, of the shares outstanding, respectively.

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 Bharat Heavy Electricals

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.

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 most recent data indicates that insiders own less than 1% of Bharat Heavy Electricals Limited. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own ₹29k worth of shares. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Bharat Heavy Electricals better, we need to consider many other factors.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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.