Jain Irrigation Systems Limited's (NSE:JISLJALEQS) market cap surged ₹1.9b last week, individual investors who have a lot riding on the company were rewarded

Key Insights

• The considerable ownership by individual investors in Jain Irrigation Systems indicates that they collectively have a greater say in management and business strategy
• 51% of the business is held by the top 16 shareholders
• Institutional ownership in Jain Irrigation Systems is 12%

A look at the shareholders of Jain Irrigation Systems Limited (NSE:JISLJALEQS) can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 43% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, individual investors were the biggest beneficiaries of last week’s 11% gain.

In the chart below, we zoom in on the different ownership groups of Jain Irrigation Systems.

See our latest analysis for Jain Irrigation Systems

What Does The Institutional Ownership Tell Us About Jain Irrigation Systems?

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.

We can see that Jain Irrigation Systems does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Jain Irrigation Systems, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Jain Irrigation Systems. The company's largest shareholder is Jalgaon Investments Pvt. Ltd., with ownership of 20%. Meanwhile, the second and third largest shareholders, hold 5.7% and 4.6%, of the shares outstanding, respectively.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 16 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Jain Irrigation Systems

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 most recent data indicates that insiders own some shares in Jain Irrigation Systems Limited. It has a market capitalization of just ₹19b, and insiders have ₹984m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 43% stake in Jain Irrigation Systems. 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 5.7%, private equity firms could influence the Jain Irrigation Systems 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

It seems that Private Companies own 30%, of the Jain Irrigation Systems stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Public Company Ownership

It appears to us that public companies own 3.9% of Jain Irrigation Systems. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 3 warning signs we've spotted with Jain Irrigation Systems (including 1 which can't be ignored) .

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.