The recent pullback must have dismayed ideaForge Technology Limited (NSE:IDEAFORGE) insiders who own 42% of the company

Key Insights

• Insiders appear to have a vested interest in ideaForge Technology's growth, as seen by their sizeable ownership
• 52% of the business is held by the top 7 shareholders
• Institutional ownership in ideaForge Technology is 12%

To get a sense of who is truly in control of ideaForge Technology Limited (NSE:IDEAFORGE), it is important to understand the ownership structure of the business. With 42% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 16% decline in share price, insiders suffered the most losses.

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

View our latest analysis for ideaForge Technology

What Does The Institutional Ownership Tell Us About ideaForge Technology?

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.

We can see that ideaForge Technology does have institutional investors; and they hold a good portion of the company's stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of ideaForge Technology, (below). Of course, keep in mind that there are other factors to consider, too.

ideaForge Technology is not owned by hedge funds. Florintree Enterprise Llp is currently the company's largest shareholder with 11% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.6% and 8.3% of the stock. Interestingly, the bottom two of the top three shareholders also hold the title of Chief Executive Officer and Member of the Board of Directors, respectively, suggesting that these insiders have a personal stake in the company.

We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of ideaForge Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders maintain a significant holding in ideaForge Technology Limited. Insiders have a ₹9.9b stake in this ₹23b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 14% stake in ideaForge Technology. 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 Equity Ownership

With a stake of 12%, private equity firms could influence the ideaForge Technology board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

We can see that Private Companies own 12%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

It appears to us that public companies own 7.1% of ideaForge Technology. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand ideaForge Technology better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with ideaForge Technology .

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.