SKF India Limited's (NSE:SKFINDIA) 3.1% loss last week hit both individual investors who own 52% as well as institutions

Key Insights

• SKF India's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 52% of the company is held by a single shareholder (AB SKF (publ))
• Institutions own 34% of SKF India

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If you want to know who really controls SKF India Limited (NSE:SKFINDIA), then you'll have to look at the makeup of its share registry. With 52% stake, public companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions who own 34% came under pressure after market cap dropped to ₹184b last week,public companies took the most losses.

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

View our latest analysis for SKF India

What Does The Institutional Ownership Tell Us About SKF 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.

We can see that SKF 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see SKF India's historic earnings and revenue below, but keep in mind there's always more to the story.

SKF India is not owned by hedge funds. The company's largest shareholder is AB SKF (publ), with ownership of 52%. This implies that they have majority interest control of the future of the company. Meanwhile, the second and third largest shareholders, hold 9.7% and 5.4%, of the shares outstanding, respectively.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of SKF 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. 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.

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 data cannot confirm that board members are 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

The general public, who are usually individual investors, hold a 14% stake in SKF India. 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.

Public Company Ownership

It appears to us that public companies own 52% of SKF India. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 1 warning sign for SKF India you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future .

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.