Shakti Pumps (India) Limited's (NSE:SHAKTIPUMP) 4.5% gain last week benefited both retail investors who own 34% as well as insiders

Key Insights

• Significant control over Shakti Pumps (India) by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 8 shareholders own 52% of the company
• 31% of Shakti Pumps (India) is held by insiders

Every investor in Shakti Pumps (India) Limited (NSE:SHAKTIPUMP) should be aware of the most powerful shareholder groups. With 34% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While retail investors were the group that reaped the most benefits after last week’s 4.5% price gain, insiders also received a 31% cut.

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)?

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.

We can see that Shakti Pumps (India) does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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.

We note that hedge funds don't have a meaningful investment in Shakti Pumps (India). Looking at our data, we can see that the largest shareholder is Shakti Sons Trust with 19% of shares outstanding. Sunil Patidar is the second largest shareholder owning 7.8% of common stock, and Ankit Patidar holds about 7.5% of the company stock. Sunil Patidar, who is the second-largest shareholder, also happens to hold the title of Senior Key Executive.

We did some more digging and found that 8 of the top shareholders account for roughly 52% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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)

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 Shakti Pumps (India) Limited. It has a market capitalization of just ₹97b, and insiders have ₹30b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 34% stake in 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

Our data indicates that Private Companies hold 27%, of the company's shares. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for Shakti Pumps (India) (1 doesn't sit too well with us) that you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.