The recent ₹5.8b market cap decrease is likely to have disappointed insiders invested in HBL Engineering Limited (NSE:HBLENGINE)

Key Insights

• HBL Engineering's significant insider ownership suggests inherent interests in company's expansion
• Kavita Aluru owns 55% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

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If you want to know who really controls HBL Engineering Limited (NSE:HBLENGINE), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 62% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders as a group endured the highest losses after market cap fell by ₹5.8b.

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

See our latest analysis for HBL Engineering

What Does The Institutional Ownership Tell Us About HBL Engineering?

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.

Less than 5% of HBL Engineering is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

We note that hedge funds don't have a meaningful investment in HBL Engineering. The company's largest shareholder is Kavita Aluru, with ownership of 55%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Meanwhile, the second and third largest shareholders, hold 1.4% and 1.4%, of the shares outstanding, respectively. Furthermore, CEO Aluru Prasad is the owner of 1.0% of the company's shares.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of HBL Engineering

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our most recent data indicates that insiders own the majority of HBL Engineering Limited. This means they can collectively make decisions for the company. That means insiders have a very meaningful ₹100b stake in this ₹162b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public, who are usually individual investors, hold a 34% stake in HBL Engineering. 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.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.