Public companies who hold 53% of SKF India Limited (NSE:SKFINDIA) gained 10%, institutions profited as well

Published
June 01, 2022
NSEI:SKFINDIA
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To get a sense of who is truly in control of SKF India Limited (NSE:SKFINDIA), it is important to understand the ownership structure of the business. With 53% stake, public 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).

While public companies were the group that reaped the most benefits after last week’s 10% price gain, institutions also received a 34% cut.

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

Check out our latest analysis for SKF India

ownership-breakdown
NSEI:SKFINDIA Ownership Breakdown June 1st 2022

What Does The Institutional Ownership Tell Us About SKF 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 SKF India does have institutional investors; and they hold a good portion of the company's stock. 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. 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 SKF India's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NSEI:SKFINDIA Earnings and Revenue Growth June 1st 2022

Hedge funds don't have many shares in SKF India. AB SKF (publ) is currently the company's largest shareholder with 53% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 8.2% and 5.6% of the shares outstanding respectively, HDFC Asset Management Company Limited and Mirae Asset Global Investments Co., Ltd are the second and third largest shareholders.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of SKF India

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

We note our data does not show any board members holding shares, personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

With a 13% ownership, the general public, mostly comprising of individual investors, have some degree of sway over SKF India. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

We can see that public companies hold 53% of the SKF India shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand SKF India better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for SKF India you should be aware of, and 1 of them is significant.

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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