Public companies account for 54% of Escorts Kubota Limited's (NSE:ESCORTS) ownership, while institutions account for 15%

Key Insights

• Escorts Kubota's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• Kubota Corporation owns 54% of the company
• Institutional ownership in Escorts Kubota is 15%

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To get a sense of who is truly in control of Escorts Kubota Limited (NSE:ESCORTS), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are public companies with 54% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And institutions on the other hand have a 15% ownership in the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.

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

Check out our latest analysis for Escorts Kubota

What Does The Institutional Ownership Tell Us About Escorts Kubota?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Escorts Kubota. 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. 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 Escorts Kubota's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Escorts Kubota. The company's largest shareholder is Kubota Corporation, with ownership of 54%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Har Parshad Company Private Limited is the second largest shareholder owning 9.6% of common stock, and HDFC Asset Management Company Limited holds about 6.0% of the company stock. Additionally, the company's CEO Nikhil Nanda directly holds 1.1% of the total shares outstanding.

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

Insider Ownership Of Escorts Kubota

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own some shares in Escorts Kubota Limited. This is a big company, so it is good to see this level of alignment. Insiders own ₹12b worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 13% stake in the company, and hence can't easily be ignored. 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 Company Ownership

Our data indicates that Private Companies hold 14%, of the company's shares. 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.

Public Company Ownership

We can see that public companies hold 54% of the Escorts Kubota shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Escorts Kubota better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Escorts Kubota , and understanding them should be part of your investment process.

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.