Rajoo Engineers Limited (NSE:RAJOOENG) Top Key Executive Rajesh Doshi, the company's largest shareholder sees 10%reduction in holdings value

Key Insights

• Rajoo Engineers' significant insider ownership suggests inherent interests in company's expansion
• A total of 7 investors have a majority stake in the company with 51% ownership
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

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To get a sense of who is truly in control of Rajoo Engineers Limited (NSE:RAJOOENG), 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 61% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to ₹12b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Rajoo Engineers, beginning with the chart below.

See our latest analysis for Rajoo Engineers

What Does The Lack Of Institutional Ownership Tell Us About Rajoo Engineers?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Rajoo Engineers might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Rajoo Engineers is not owned by hedge funds. From our data, we infer that the largest shareholder is Rajesh Doshi (who also holds the title of Top Key Executive) with 12% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. For context, the second largest shareholder holds about 9.2% of the shares outstanding, followed by an ownership of 7.3% by the third-largest shareholder. Interestingly, the third-largest shareholder, Khushboo Doshi is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. 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 Rajoo Engineers

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.

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 most recent data indicates that insiders own the majority of Rajoo Engineers Limited. This means they can collectively make decisions for the company. Given it has a market cap of ₹12b, that means they have ₹7.5b worth of shares. 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

With a 39% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Rajoo Engineers. 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.

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. Be aware that Rajoo Engineers is showing 1 warning sign in our investment analysis , you should know about...

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.