Hindustan Aeronautics Limited's (NSE:HAL) last week's 7.6% decline must have disappointed state or government who have a significant stake

Key Insights

• Hindustan Aeronautics' 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 72% stake
• 12% of Hindustan Aeronautics is held by Institutions

A look at the shareholders of Hindustan Aeronautics Limited (NSE:HAL) can tell us which group is most powerful. The group holding the most number of shares in the company, around 73% to be precise, is state or government. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, state or government endured the biggest losses as the stock fell by 7.6%.

In the chart below, we zoom in on the different ownership groups of Hindustan Aeronautics.

View our latest analysis for Hindustan Aeronautics

What Does The Institutional Ownership Tell Us About Hindustan Aeronautics?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

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

We note that hedge funds don't have a meaningful investment in Hindustan Aeronautics. Our data shows that India is the largest shareholder with 72% 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 2.2% and 1.3% of the stock.

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

Insider Ownership Of Hindustan Aeronautics

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our data cannot confirm that board members are 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 Hindustan Aeronautics. 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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Hindustan Aeronautics (of which 1 is concerning!) you should know about.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.