After the recent decline, Krishna Defence and Allied Industries Limited (NSE:KRISHNADEF) CEO Ankur Shah's holdings have lost 10% of their value

Key Insights

• Krishna Defence and Allied Industries' significant insider ownership suggests inherent interests in company's expansion
• A total of 2 investors have a majority stake in the company with 50% ownership
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

A look at the shareholders of Krishna Defence and Allied Industries Limited (NSE:KRISHNADEF) can tell us which group is most powerful. The group holding the most number of shares in the company, around 51% to be precise, is individual insiders. 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, insiders as a group endured the highest losses after market cap fell by ₹961m.

In the chart below, we zoom in on the different ownership groups of Krishna Defence and Allied Industries.

View our latest analysis for Krishna Defence and Allied Industries

What Does The Lack Of Institutional Ownership Tell Us About Krishna Defence and Allied Industries?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Krishna Defence and Allied Industries might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Krishna Defence and Allied Industries is not owned by hedge funds. With a 38% stake, CEO Ankur Shah is the largest shareholder. Pallavi Shah is the second largest shareholder owning 12% of common stock, and Krish Industries Private Limited holds about 6.1% of the company stock.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 50% stake.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Krishna Defence and Allied Industries

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.

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 the majority of Krishna Defence and Allied Industries Limited. This means they can collectively make decisions for the company. That means they own ₹4.3b worth of shares in the ₹8.5b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 39% stake in Krishna Defence and Allied Industries. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

Our data indicates that Private Companies hold 10%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Krishna Defence and Allied Industries better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Krishna Defence and Allied Industries (including 1 which shouldn't be ignored) .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.