State or government among Garden Reach Shipbuilders & Engineers Limited's (NSE:GRSE) largest shareholders, saw gain in holdings value after stock jumped 18% last week

Key Insights

• The considerable ownership by state or government in Garden Reach Shipbuilders & Engineers indicates that they collectively have a greater say in management and business strategy
• 75% of the company is held by a single shareholder (India)
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

A look at the shareholders of Garden Reach Shipbuilders & Engineers Limited (NSE:GRSE) can tell us which group is most powerful. We can see that state or government own the lion's share in the company with 75% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, state or government collectively scored the highest last week as the company hit ₹117b market cap following a 18% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about Garden Reach Shipbuilders & Engineers.

View our latest analysis for Garden Reach Shipbuilders & Engineers

What Does The Institutional Ownership Tell Us About Garden Reach Shipbuilders & Engineers?

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.

Garden Reach Shipbuilders & Engineers already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Garden Reach Shipbuilders & Engineers' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Garden Reach Shipbuilders & Engineers. Looking at our data, we can see that the largest shareholder is India with 75% of shares outstanding. This implies that they have majority interest control of the future of the company. In comparison, the second and third largest shareholders hold about 4.9% and 1.1% of the stock.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Garden Reach Shipbuilders & Engineers

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

We can report that insiders do own shares in Garden Reach Shipbuilders & Engineers Limited. The insiders have a meaningful stake worth ₹1.3b. Most would see this as a real positive. Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

With a 17% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Garden Reach Shipbuilders & Engineers. 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. Take risks for example - Garden Reach Shipbuilders & Engineers has 1 warning sign we think you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.