HPL Electric & Power Limited's (NSE:HPL) largest shareholders are private companies who were rewarded as market cap surged ₹3.9b last week

Key Insights

• Significant control over HPL Electric & Power by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 3 shareholders own 58% of the company
• Insider ownership in HPL Electric & Power is 23%

A look at the shareholders of HPL Electric & Power Limited (NSE:HPL) can tell us which group is most powerful. The group holding the most number of shares in the company, around 50% to be precise, is private companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, private companies benefitted the most after the company's market cap rose by ₹3.9b last week.

In the chart below, we zoom in on the different ownership groups of HPL Electric & Power.

Check out our latest analysis for HPL Electric & Power

What Does The Lack Of Institutional Ownership Tell Us About HPL Electric & Power?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

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. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of HPL Electric & Power, for yourself, below.

HPL Electric & Power is not owned by hedge funds. HPL India Ltd. is currently the company's largest shareholder with 27% of shares outstanding. In comparison, the second and third largest shareholders hold about 18% and 12% of the stock. Lalit Seth, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board. Additionally, the company's CEO Rishi Seth directly holds 3.5% of the total shares outstanding.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of HPL Electric & Power

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. 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.

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 insiders own a significant proportion of HPL Electric & Power Limited. Insiders have a ₹6.6b stake in this ₹29b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 26% stake in HPL Electric & Power. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

It seems that Private Companies own 50%, of the HPL Electric & Power stock. 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. Take risks for example - HPL Electric & Power has 2 warning signs (and 1 which can't be ignored) we think you should know about.

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.