- Significant control over Olectra Greentech by private companies implies that the general public has more power to influence management and governance-related decisions
- The largest shareholder of the company is Megha Engineering & Infrastructures Limited with a 50% stake
- Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
If you want to know who really controls Olectra Greentech Limited (NSE:OLECTRA), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 55% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And last week, private companies endured the biggest losses as the stock fell by 4.1%.
Let's take a closer look to see what the different types of shareholders can tell us about Olectra Greentech.
What Does The Institutional Ownership Tell Us About Olectra Greentech?
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.
Olectra Greentech 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 Olectra Greentech, (below). Of course, keep in mind that there are other factors to consider, too.
Olectra Greentech is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Megha Engineering & Infrastructures Limited with 50% of shares outstanding. This implies that they have majority interest control of the future of the company. With 4.2% and 2.4% of the shares outstanding respectively, Gyanmay Investment Advisors LLP and Nomura Asset Management Co., Ltd. are the second and third largest shareholders.
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 is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Olectra Greentech
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.
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.
Shareholders would probably be interested to learn that insiders own shares in Olectra Greentech Limited. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around ₹2.3b worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.
General Public Ownership
The general public-- including retail investors -- own 35% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Company Ownership
We can see that Private Companies own 55%, 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.
It's always worth thinking about the different groups who own shares in a company. But to understand Olectra Greentech better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Olectra Greentech you should know about.
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.
Valuation is complex, but we're helping make it simple.
Find out whether Olectra Greentech is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free Analysis
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.