Stock Analysis

Recent 11% pullback would hurt Om Infra Limited (NSE:OMINFRAL) insiders

NSEI:OMINFRAL
Source: Shutterstock

Key Insights

  • Insiders appear to have a vested interest in Om Infra's growth, as seen by their sizeable ownership
  • A total of 9 investors have a majority stake in the company with 52% ownership
  • Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of Om Infra Limited (NSE:OMINFRAL), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 53% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to ₹13b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

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

See our latest analysis for Om Infra

ownership-breakdown
NSEI:OMINFRAL Ownership Breakdown January 29th 2025

What Does The Institutional Ownership Tell Us About Om Infra?

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 Om Infra does have institutional investors; and they hold a good portion of the company's stock. 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 Om Infra's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NSEI:OMINFRAL Earnings and Revenue Growth January 29th 2025

Hedge funds don't have many shares in Om Infra. T C Kothari And Sons Family Trust is currently the company's largest shareholder with 12% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.6% and 7.4% of the stock. Sunil Kothari, who is the third-largest shareholder, also happens to hold the title of Vice Chairman. In addition, we found that Vikas Kothari, the CEO has 1.9% of the shares allocated to their name.

We did some more digging and found that 9 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. 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 Om Infra

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.

It seems that insiders own more than half the Om Infra Limited stock. This gives them a lot of power. Given it has a market cap of ₹13b, that means they have ₹7.1b worth of shares. 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 23% stake in Om Infra. 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

We can see that Private Companies own 16%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 3 warning signs for Om Infra that you should be aware of before investing here.

Of course this may not be the best stock to buy. So take a peek at this free 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.

About NSEI:OMINFRAL

Om Infra

Engages in the design, engineering, manufacture, supply, installation, testing, and commissioning of hydro mechanical equipment for hydroelectric power and irrigation projects in India and internationally.

Excellent balance sheet average dividend payer.