Retail investors among Texmaco Rail & Engineering Limited's (NSE:TEXRAIL) largest stockholders and were hit after last week's 7.0% price drop

Key Insights

• Significant control over Texmaco Rail & Engineering by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 7 shareholders own 52% of the company
• 16% of Texmaco Rail & Engineering is held by Institutions

Every investor in Texmaco Rail & Engineering Limited (NSE:TEXRAIL) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 37% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to ₹84b last week, retail investors would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Texmaco Rail & Engineering.

View our latest analysis for Texmaco Rail & Engineering

What Does The Institutional Ownership Tell Us About Texmaco Rail & Engineering?

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 Texmaco Rail & Engineering. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Texmaco Rail & Engineering's historic earnings and revenue below, but keep in mind there's always more to the story.

Texmaco Rail & Engineering is not owned by hedge funds. Our data shows that Zuari Industries Limited is the largest shareholder with 16% of shares outstanding. With 15% and 7.2% of the shares outstanding respectively, Texmaco Infrastructure & Holdings Limited and Saroj Poddar are the second and third largest shareholders. Saroj Poddar, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Texmaco Rail & Engineering

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 some shares in Texmaco Rail & Engineering Limited. This is a big company, so it is good to see this level of alignment. Insiders own ₹6.1b worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 37% 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.

Private Company Ownership

It seems that Private Companies own 8.9%, of the Texmaco Rail & Engineering stock. 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.

Public Company Ownership

It appears to us that public companies own 31% of Texmaco Rail & Engineering. 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:

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. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Texmaco Rail & Engineering you should know about.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.