The recent 4.5% gain must have brightened CEO Dinesh Agarwal's week, IndiaMART InterMESH Limited's (NSE:INDIAMART) most bullish insider

Key Insights

• Insiders appear to have a vested interest in IndiaMART InterMESH's growth, as seen by their sizeable ownership
• The top 3 shareholders own 54% of the company
• Institutional ownership in IndiaMART InterMESH is 28%

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Every investor in IndiaMART InterMESH Limited (NSE:INDIAMART) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 52% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

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.

See our latest analysis for IndiaMART InterMESH

What Does The Institutional Ownership Tell Us About IndiaMART InterMESH?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

IndiaMART InterMESH already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at IndiaMART InterMESH's earnings history below. Of course, the future is what really matters.

IndiaMART InterMESH is not owned by hedge funds. With a 29% stake, CEO Dinesh Agarwal is the largest shareholder. Meanwhile, the second and third largest shareholders, hold 20% and 5.1%, of the shares outstanding, respectively. 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

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.

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 that insiders own more than half the IndiaMART InterMESH Limited stock. This gives them a lot of power. Given it has a market cap of ₹160b, that means insiders have a whopping ₹82b worth of shares in their own names. 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 20% 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:

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 - IndiaMART InterMESH has 2 warning signs we think you should be aware of.

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.

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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.