IndiaMART InterMESH Limited (NSE:INDIAMART) CEO Dinesh Agarwal's holdings dropped 3.8% in value as a result of the recent pullback

Key Insights

• Insiders appear to have a vested interest in IndiaMART InterMESH's growth, as seen by their sizeable ownership
• 54% of the business is held by the top 3 shareholders
• 34% of IndiaMART InterMESH is held by Institutions

A look at the shareholders of IndiaMART InterMESH Limited (NSE:INDIAMART) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 52% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, insiders endured the biggest losses as the stock fell by 3.8%.

In the chart below, we zoom in on the different ownership groups of IndiaMART InterMESH.

Check out our latest analysis for IndiaMART InterMESH

What Does The Institutional Ownership Tell Us About IndiaMART InterMESH?

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 IndiaMART InterMESH 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see IndiaMART InterMESH's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in IndiaMART InterMESH. With a 29% stake, CEO Dinesh Agarwal is the largest shareholder. For context, the second largest shareholder holds about 20% of the shares outstanding, followed by an ownership of 5.1% by the third-largest shareholder. Interestingly, the second-largest shareholder, Brijesh Agrawal is also Top Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 IndiaMART InterMESH

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

It seems that insiders own more than half the IndiaMART InterMESH Limited stock. This gives them a lot of power. That means insiders have a very meaningful ₹65b stake in this ₹126b business. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

With a 15% ownership, the general public, mostly comprising of individual investors, have some degree of sway over IndiaMART InterMESH. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that IndiaMART InterMESH is showing 2 warning signs in our investment analysis , 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.