While institutions invested in SEPC Limited (NSE:SEPC) benefited from last week's 19% gain, private companies stood to gain the most

Key Insights

• The considerable ownership by private companies in SEPC indicates that they collectively have a greater say in management and business strategy
• The top 3 shareholders own 56% of the company
• Institutional ownership in SEPC is 33%

If you want to know who really controls SEPC Limited (NSE:SEPC), then you'll have to look at the makeup of its share registry. With 49% stake, private companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Private companies gained the most after market cap touched ₹28b last week, while institutions who own 33% also benefitted.

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

Check out our latest analysis for SEPC

What Does The Institutional Ownership Tell Us About SEPC?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that SEPC does have institutional investors; and they hold a good portion of the company's stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at SEPC's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in SEPC. Our data shows that Mark Ab Capital Investment Llc is the largest shareholder with 38% of shares outstanding. Shriram Group Pvt. Co. is the second largest shareholder owning 12% of common stock, and Punjab National Bank, Asset Management Arm holds about 7.2% of the company stock.

To make our study more interesting, we found that the top 3 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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of SEPC

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own less than 1% of SEPC Limited. But they may have an indirect interest through a corporate structure that we haven't picked up on. It appears that the board holds about ₹961k worth of stock. This compares to a market capitalization of ₹28b. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public-- including retail investors -- own 17% 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 49%, 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 SEPC better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for SEPC 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.