Public companies among Isgec Heavy Engineering Limited's (NSE:ISGEC) largest stockholders and were hit after last week's 8.1% price drop

Key Insights

• Significant control over Isgec Heavy Engineering by public companies implies that the general public has more power to influence management and governance-related decisions
• A total of 2 investors have a majority stake in the company with 54% ownership
• Insiders own 15% of Isgec Heavy Engineering

To get a sense of who is truly in control of Isgec Heavy Engineering Limited (NSE:ISGEC), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 45% to be precise, is public companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, public companies as a group endured the highest losses last week after market cap fell by ₹6.5b.

In the chart below, we zoom in on the different ownership groups of Isgec Heavy Engineering.

See our latest analysis for Isgec Heavy Engineering

What Does The Institutional Ownership Tell Us About Isgec Heavy Engineering?

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.

As you can see, institutional investors have a fair amount of stake in Isgec Heavy Engineering. 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 Isgec Heavy Engineering, (below). Of course, keep in mind that there are other factors to consider, too.

Isgec Heavy Engineering is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is The Yamuna Syndicate Limited with 45% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.0% and 6.2% of the stock. Aditya Puri, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

After doing some more digging, we found that the top 2 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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Isgec Heavy Engineering

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 most recent data indicates that insiders own a reasonable proportion of Isgec Heavy Engineering Limited. Insiders have a ₹11b stake in this ₹74b 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 25% stake in Isgec Heavy Engineering. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

It appears to us that public companies own 45% of Isgec Heavy Engineering. 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 Isgec Heavy Engineering better, we need to consider many other factors. Be aware that Isgec Heavy Engineering is showing 1 warning sign in our investment analysis , you should know about...

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.