private companies who own 32% along with institutions invested in Patel Engineering Limited (NSE:PATELENG) saw increase in their holdings value last week

Key Insights

• The considerable ownership by private companies in Patel Engineering indicates that they collectively have a greater say in management and business strategy
• A total of 3 investors have a majority stake in the company with 51% ownership
• Institutions own 32% of Patel Engineering

Every investor in Patel Engineering Limited (NSE:PATELENG) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 32% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 11% increase in the stock price last week, private companies profited the most, but institutions who own 32% stock also stood to gain from the increase.

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

View our latest analysis for Patel Engineering

What Does The Institutional Ownership Tell Us About Patel Engineering?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Patel Engineering. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Patel Engineering's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Patel Engineering. Raahitya Constructions Pvt. Ltd is currently the company's largest shareholder with 28% of shares outstanding. In comparison, the second and third largest shareholders hold about 19% and 4.8% of the stock. Additionally, the company's CEO Rupen Patel directly holds 3.6% of the total shares outstanding.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 Patel Engineering

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

We can report that insiders do own shares in Patel Engineering Limited. As individuals, the insiders collectively own ₹4.4b worth of the ₹53b company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 27% stake in Patel Engineering. 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

It seems that Private Companies own 32%, of the Patel Engineering stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 3 warning signs we've spotted with Patel Engineering (including 1 which is significant) .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.