IndiaMART InterMESH Limited's (NSE:INDIAMART) CEO Dinesh Agarwal is the most upbeat insider, and their holdings increased by 4.2% last week

Key Insights

• Insiders appear to have a vested interest in IndiaMART InterMESH's growth, as seen by their sizeable ownership
• A total of 3 investors have a majority stake in the company with 54% ownership
• 34% of IndiaMART InterMESH is held by Institutions

If you want to know who really controls IndiaMART InterMESH Limited (NSE:INDIAMART), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 54% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, insiders benefitted the most after the company's market cap rose by ₹6.8b last week.

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

Check out our latest analysis for IndiaMART InterMESH

What Does The Institutional Ownership Tell Us About IndiaMART InterMESH?

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.

IndiaMART InterMESH already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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. Looking at our data, we can see that the largest shareholder is the CEO Dinesh Agarwal with 29% of shares outstanding. In comparison, the second and third largest shareholders hold about 20% and 5.1% of the stock. 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.

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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 information suggests that insiders own more than half of IndiaMART InterMESH Limited. This gives them effective control of the company. Insiders own ₹90b worth of shares in the ₹169b company. That's extraordinary! 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

The general public, who are usually individual investors, hold a 12% stake in 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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with IndiaMART InterMESH , and understanding them should be part of your investment process.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

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