Retail investors among Shakti Pumps (India) Limited's (NSE:SHAKTIPUMP) largest stockholders and were hit after last week's 8.1% price drop

Key Insights

• The considerable ownership by retail investors in Shakti Pumps (India) indicates that they collectively have a greater say in management and business strategy
• A total of 8 investors have a majority stake in the company with 51% ownership
• Insider ownership in Shakti Pumps (India) is 30%

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A look at the shareholders of Shakti Pumps (India) Limited (NSE:SHAKTIPUMP) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are retail investors with 31% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While insiders, who own 30% shares weren’t spared from last week’s ₹6.9b market cap drop, retail investors as a group suffered the maximum losses

Let's delve deeper into each type of owner of Shakti Pumps (India), beginning with the chart below.

View our latest analysis for Shakti Pumps (India)

What Does The Institutional Ownership Tell Us About Shakti Pumps (India)?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Shakti Pumps (India) 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 Shakti Pumps (India), (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Shakti Pumps (India). The company's largest shareholder is Shakti Sons Trust, with ownership of 18%. Meanwhile, the second and third largest shareholders, hold 7.6% and 7.3%, of the shares outstanding, respectively. Sunil Patidar, who is the second-largest shareholder, also happens to hold the title of Senior Key Executive.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. 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 Shakti Pumps (India)

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.

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 Shakti Pumps (India) Limited. Insiders have a ₹23b stake in this ₹78b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shakti Pumps (India). 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

We can see that Private Companies own 27%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shakti Pumps (India) better, we need to consider many other factors. Take risks for example - Shakti Pumps (India) has 1 warning sign we think 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.