Despite recent sales, Power Mech Projects Limited (NSE:POWERMECH) insiders still control 58% of the company

Key Insights

• Significant insider control over Power Mech Projects implies vested interests in company growth
• The top 4 shareholders own 55% of the company
• Recent sales by insiders

A look at the shareholders of Power Mech Projects Limited (NSE:POWERMECH) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 58% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Despite recent sales, insiders own the most shares in the company. As a result, they stand to gain the most after the stock gained 6.9% in the past week.

In the chart below, we zoom in on the different ownership groups of Power Mech Projects.

Check out our latest analysis for Power Mech Projects

What Does The Institutional Ownership Tell Us About Power Mech Projects?

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.

Power Mech Projects 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. 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 Power Mech Projects' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Power Mech Projects. With a 31% stake, CEO Sajja Babu is the largest shareholder. Aishwarya Kurra is the second largest shareholder owning 9.1% of common stock, and HDFC Asset Management Company Limited holds about 7.8% of the company stock.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Power Mech Projects

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own the majority of Power Mech Projects Limited. This means they can collectively make decisions for the company. That means they own ₹48b worth of shares in the ₹83b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 19% stake in Power Mech Projects. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Power Mech Projects you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com