Ravindra Energy Limited (NSE:RELTD) surges 23%; private companies who own 37% shares profited along with insiders

Key Insights

• Ravindra Energy's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 64% of the business is held by the top 2 shareholders
• Insider ownership in Ravindra Energy is 35%

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If you want to know who really controls Ravindra Energy Limited (NSE:RELTD), then you'll have to look at the makeup of its share registry. We can see that private companies own the lion's share in the company with 37% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While private companies were the group that benefitted the most from last week’s ₹4.7b market cap gain, insiders too had a 35% share in those profits.

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

Check out our latest analysis for Ravindra Energy

What Does The Institutional Ownership Tell Us About Ravindra Energy?

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.

Ravindra Energy already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Ravindra Energy, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Ravindra Energy. Khandepar Investments Pvt. Ltd is currently the company's largest shareholder with 35% of shares outstanding. In comparison, the second and third largest shareholders hold about 29% and 2.8% of the stock.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. 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 Ravindra Energy

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 a reasonable proportion of Ravindra Energy Limited. Insiders have a ₹8.8b stake in this ₹25b 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

The general public-- including retail investors -- own 20% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

Our data indicates that Private Companies hold 37%, of the company's shares. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Ravindra Energy better, we need to consider many other factors. For example, we've discovered 2 warning signs for Ravindra Energy (1 is significant!) that you should be aware of before investing here.

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.