Swelect Energy Systems Limited (NSE:SWELECTES) Co-Chief Executive Officer Ramasamy Chellappan, the company's largest shareholder sees 10%reduction in holdings value

Key Insights

• Significant insider control over Swelect Energy Systems implies vested interests in company growth
• The top 2 shareholders own 53% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Swelect Energy Systems Limited (NSE:SWELECTES), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 66% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 10% decline in share price, insiders suffered the most losses.

Let's delve deeper into each type of owner of Swelect Energy Systems, beginning with the chart below.

View our latest analysis for Swelect Energy Systems

What Does The Institutional Ownership Tell Us About Swelect Energy Systems?

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.

Institutions have a very small stake in Swelect Energy Systems. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

Swelect Energy Systems is not owned by hedge funds. From our data, we infer that the largest shareholder is Ramasamy Chellappan (who also holds the title of Co-Chief Executive Officer) with 50% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. With 3.1% and 1.7% of the shares outstanding respectively, Arthanari Balan and Satishchandra Doshi are the second and third largest shareholders. Interestingly, the second-largest shareholder, Arthanari Balan is also Co-Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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

Insider Ownership Of Swelect Energy Systems

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 the majority of Swelect Energy Systems Limited. This means they can collectively make decisions for the company. Given it has a market cap of ₹13b, that means they have ₹8.6b worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 31% stake in the company, and hence can't easily be ignored. 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.

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 Swelect Energy Systems that 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.