NBCC (India) Limited's (NSE:NBCC) last week's 4.8% decline must have disappointed state or government who have a significant stake

Key Insights

• NBCC (India)'s significant state or government ownership suggests that the key decisions are influenced by shareholders from the larger public
• Ministry of Housing and Urban Poverty Alleviation, Government of India owns 62% of the company
• Institutions own 13% of NBCC (India)

Every investor in NBCC (India) Limited (NSE:NBCC) should be aware of the most powerful shareholder groups. We can see that state or government own the lion's share in the company with 62% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, state or government as a group endured the highest losses last week after market cap fell by ₹15b.

Let's delve deeper into each type of owner of NBCC (India), beginning with the chart below.

Check out our latest analysis for NBCC (India)

What Does The Institutional Ownership Tell Us About NBCC (India)?

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.

NBCC (India) already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 NBCC (India), (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in NBCC (India). Looking at our data, we can see that the largest shareholder is Ministry of Housing and Urban Poverty Alleviation, Government of India with 62% of shares outstanding. This implies that they have majority interest control of the future of the company. With 6.0% and 2.3% of the shares outstanding respectively, Life Insurance Corporation of India, Asset Management Arm and Nippon Life India Asset Management Limited are the second and third largest shareholders.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of NBCC (India)

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 data suggests that insiders own under 1% of NBCC (India) Limited in their own names. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own ₹859k worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over NBCC (India). While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand NBCC (India) better, we need to consider many other factors. For instance, we've identified 2 warning signs for NBCC (India) that you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.