Swaraj Engines Limited's (NSE:SWARAJENG) market cap surged ₹3.6b last week, public companies who have a lot riding on the company were rewarded

Key Insights

• The considerable ownership by public companies in Swaraj Engines indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is Mahindra & Mahindra Limited with a 52% stake
• 10% of Swaraj Engines is held by Institutions

Every investor in Swaraj Engines Limited (NSE:SWARAJENG) should be aware of the most powerful shareholder groups. With 52% 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).

As a result, public companies collectively scored the highest last week as the company hit ₹30b market cap following a 13% gain in the stock.

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

View our latest analysis for Swaraj Engines

What Does The Institutional Ownership Tell Us About Swaraj Engines?

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.

As you can see, institutional investors have a fair amount of stake in Swaraj Engines. 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 Swaraj Engines, (below). Of course, keep in mind that there are other factors to consider, too.

Swaraj Engines is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Mahindra & Mahindra Limited with 52% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. In comparison, the second and third largest shareholders hold about 6.8% and 1.5% of the stock.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Swaraj Engines

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own some shares in Swaraj Engines Limited. It has a market capitalization of just ₹30b, and insiders have ₹1.3b worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Swaraj Engines. 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.

Public Company Ownership

Public companies currently own 52% of Swaraj Engines stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Swaraj Engines better, we need to consider many other factors. Be aware that Swaraj Engines is showing 1 warning sign in our investment analysis , you should know about...

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.