Positive week for Kirloskar Oil Engines Limited (NSE:KIRLOSENG) institutional investors who lost 27% over the past year

Key Insights

• Significantly high institutional ownership implies Kirloskar Oil Engines' stock price is sensitive to their trading actions
• 52% of the business is held by the top 8 shareholders
• Insider ownership in Kirloskar Oil Engines is 25%

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To get a sense of who is truly in control of Kirloskar Oil Engines Limited (NSE:KIRLOSENG), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are institutions 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).

Institutional investors would probably welcome last week's 7.9% increase in the share price after a year of 27% losses as a sign that returns may to begin trending higher.

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

Check out our latest analysis for Kirloskar Oil Engines

What Does The Institutional Ownership Tell Us About Kirloskar Oil Engines?

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.

Kirloskar Oil Engines 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. 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 Kirloskar Oil Engines' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Kirloskar Oil Engines. Rahul Kirloskar is currently the company's largest shareholder with 12% of shares outstanding. With 7.8% and 7.1% of the shares outstanding respectively, DSP BlackRock Investment Managers Pvt. Ltd. and DSP Asset Managers Pvt. Ltd are the second and third largest shareholders.

We did some more digging and found that 8 of the top shareholders account for roughly 52% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 Kirloskar Oil Engines

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 maintain a significant holding in Kirloskar Oil Engines Limited. Insiders own ₹34b worth of shares in the ₹135b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 24% stake in Kirloskar Oil Engines. 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

Public companies currently own 5.7% of Kirloskar Oil Engines stock. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Kirloskar Oil Engines better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Kirloskar Oil Engines (including 1 which is concerning) .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.