Individual investors invested in Prakash Pipes Limited (NSE:PPL) copped the brunt of last week's ₹1.3b market cap decline

Key Insights

• The considerable ownership by individual investors in Prakash Pipes indicates that they collectively have a greater say in management and business strategy
• The top 16 shareholders own 50% of the company
• Insiders own 26% of Prakash Pipes

If you want to know who really controls Prakash Pipes Limited (NSE:PPL), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual investors with 38% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, individual investors endured the biggest losses as the stock fell by 13%.

In the chart below, we zoom in on the different ownership groups of Prakash Pipes.

Check out our latest analysis for Prakash Pipes

What Does The Institutional Ownership Tell Us About Prakash Pipes?

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.

Since institutions own only a small portion of Prakash Pipes, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Hedge funds don't have many shares in Prakash Pipes. The company's largest shareholder is Ved Agarwal, with ownership of 20%. Gmk Builders Pvt. Ltd. is the second largest shareholder owning 4.3% of common stock, and Amarjoti Vanijya Pvt Ltd holds about 3.4% of the company stock.

A closer look at our ownership figures suggests that the top 16 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Prakash Pipes

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 information suggests that insiders maintain a significant holding in Prakash Pipes Limited. Insiders have a ₹2.3b stake in this ₹8.7b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 38% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Prakash Pipes. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 33%, of the company's shares. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Prakash Pipes you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.