Jupiter Wagons Limited's (NSE:JWL) top owners are private companies with 59% stake, while 18% is held by institutions

Key Insights

• Jupiter Wagons' significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 51% of the business is held by the top 3 shareholders
• Insider ownership in Jupiter Wagons is 11%

To get a sense of who is truly in control of Jupiter Wagons Limited (NSE:JWL), it is important to understand the ownership structure of the business. We can see that private companies own the lion's share in the company with 59% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Institutions, on the other hand, account for 18% of the company's stockholders. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time.

In the chart below, we zoom in on the different ownership groups of Jupiter Wagons.

Check out our latest analysis for Jupiter Wagons

What Does The Institutional Ownership Tell Us About Jupiter Wagons?

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.

Jupiter Wagons 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. 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 Jupiter Wagons, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Jupiter Wagons. Our data shows that Karisma Goods Private Limited is the largest shareholder with 22% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 19% and 11%, of the shares outstanding, respectively.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 51% stake.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 Jupiter Wagons

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.

It seems insiders own a significant proportion of Jupiter Wagons Limited. It has a market capitalization of just ₹285b, and insiders have ₹32b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public-- including retail investors -- own 12% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 59%, of the shares on issue. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Jupiter Wagons has 3 warning signs (and 2 which don't sit too well with us) we think you should know about.

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