With 49% ownership in Kalpataru Projects International Limited (NSE:KPIL), institutional investors have a lot riding on the business

Key Insights

• Significantly high institutional ownership implies Kalpataru Projects International's stock price is sensitive to their trading actions
• 51% of the business is held by the top 5 shareholders
• Insider ownership in Kalpataru Projects International is 13%

To get a sense of who is truly in control of Kalpataru Projects International Limited (NSE:KPIL), it is important to understand the ownership structure of the business. We can see that institutions own the lion's share in the company with 49% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And things are looking up for institutional investors after the company gained ₹6.5b in market cap last week. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 115%.

Let's take a closer look to see what the different types of shareholders can tell us about Kalpataru Projects International.

Check out our latest analysis for Kalpataru Projects International

What Does The Institutional Ownership Tell Us About Kalpataru Projects International?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Kalpataru Projects International does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Kalpataru Projects International's earnings history below. Of course, the future is what really matters.

Kalpataru Projects International is not owned by hedge funds. Our data shows that K.C.Holdings Pvt. Ltd. is the largest shareholder with 13% of shares outstanding. With 11% and 9.5% of the shares outstanding respectively, Mofatraj Munot and SBI Funds Management Limited are the second and third largest shareholders.

On looking further, we found that 51% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in 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 Kalpataru Projects International

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our information suggests that insiders maintain a significant holding in Kalpataru Projects International Limited. It has a market capitalization of just ₹220b, and insiders have ₹29b 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

With a 15% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Kalpataru Projects International. 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 23%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Kalpataru Projects International better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Kalpataru Projects International you should be aware of, and 1 of them can't be ignored.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com