Insiders were the biggest winners as Ramky Infrastructure Limited's (NSE:RAMKY) market cap grew by ₹4.0b last week

Key Insights

• Insiders appear to have a vested interest in Ramky Infrastructure's growth, as seen by their sizeable ownership
• The top 2 shareholders own 50% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

We've discovered 1 warning sign about Ramky Infrastructure. View them for free.

To get a sense of who is truly in control of Ramky Infrastructure Limited (NSE:RAMKY), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 64% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit ₹35b market cap following a 13% gain in the stock.

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

View our latest analysis for Ramky Infrastructure

What Does The Lack Of Institutional Ownership Tell Us About Ramky Infrastructure?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. Ramky Infrastructure's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

We note that hedge funds don't have a meaningful investment in Ramky Infrastructure. Sharan Alla is currently the company's largest shareholder with 32% of shares outstanding. Alla Ayodhya Reddy is the second largest shareholder owning 18% of common stock, and Alla Dakshayani holds about 9.9% of the company stock. Additionally, the company's CEO Rathnakara Yancharla directly holds 2.4% of the total shares outstanding.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Ramky Infrastructure

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

It seems that insiders own more than half the Ramky Infrastructure Limited stock. This gives them a lot of power. So they have a ₹22b stake in this ₹35b business. 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-- including retail investors -- own 25% stake in the company, and hence can't easily be ignored. 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

Our data indicates that Private Companies hold 11%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Ramky Infrastructure better, we need to consider many other factors. For instance, we've identified 1 warning sign for Ramky Infrastructure that you should be aware of.

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.