The recent 10% gain must have brightened CEO Krushang Shah's week, Giriraj Civil Developers Limited's (NSE:GIRIRAJ) most bullish insider

Key Insights

• Giriraj Civil Developers' significant insider ownership suggests inherent interests in company's expansion
• A total of 2 investors have a majority stake in the company with 54% ownership
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Giriraj Civil Developers Limited (NSE:GIRIRAJ) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 68% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit ₹9.1b market cap following a 10% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Giriraj Civil Developers.

View our latest analysis for Giriraj Civil Developers

What Does The Lack Of Institutional Ownership Tell Us About Giriraj Civil Developers?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. Alternatively, there might be something about the company that has kept institutional investors away. Giriraj Civil Developers' earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

We note that hedge funds don't have a meaningful investment in Giriraj Civil Developers. The company's CEO Krushang Shah is the largest shareholder with 38% of shares outstanding. For context, the second largest shareholder holds about 17% of the shares outstanding, followed by an ownership of 9.5% by the third-largest shareholder.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 54% stake.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Giriraj Civil Developers

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.

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.

It seems that insiders own more than half the Giriraj Civil Developers Limited stock. This gives them a lot of power. Given it has a market cap of ₹9.1b, that means they have ₹6.2b worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Giriraj Civil Developers. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 11%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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. Be aware that Giriraj Civil Developers is showing 3 warning signs in our investment analysis , and 2 of those are a bit concerning...

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com