State or government who have a significant stake must be disappointed along with institutions after Hindustan Aeronautics Limited's (NSE:HAL) market cap dropped by ₹208b

Key Insights

• Significant control over Hindustan Aeronautics by state or government implies that the general public has more power to influence management and governance-related decisions
• India owns 72% of the company
• Institutional ownership in Hindustan Aeronautics is 15%

A look at the shareholders of Hindustan Aeronautics Limited (NSE:HAL) can tell us which group is most powerful. We can see that state or government own the lion's share in the company with 73% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 6.7% decrease in the stock price last week, state or government suffered the most losses, but institutions who own 15% stock also took a hit.

Let's delve deeper into each type of owner of Hindustan Aeronautics, beginning with the chart below.

View our latest analysis for Hindustan Aeronautics

What Does The Institutional Ownership Tell Us About Hindustan Aeronautics?

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.

Hindustan Aeronautics already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. The company's largest shareholder is India, with ownership of 72%. This implies that they have majority interest control of the future of the company. Meanwhile, the second and third largest shareholders, hold 2.0% and 1.6%, of the shares outstanding, respectively.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Hindustan Aeronautics

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.

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.

We note our data does not show any board members 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

With a 12% ownership, the general public, mostly comprising of individual investors, have some degree of sway over 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Hindustan Aeronautics better, we need to consider many other factors. Take risks for example - Hindustan Aeronautics has 1 warning sign we think you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.