V-Guard Industries Limited's (NSE:VGUARD) most bullish insider, CEO Mithun Chittilappilly must be pleased with the recent 3.5% gain

Key Insights

• Significant insider control over V-Guard Industries implies vested interests in company growth
• A total of 4 investors have a majority stake in the company with 55% ownership
• Institutions own 32% of V-Guard Industries

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Every investor in V-Guard Industries Limited (NSE:VGUARD) should be aware of the most powerful shareholder groups. With 53% stake, individual insiders 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).

Clearly, insiders benefitted the most after the company's market cap rose by ₹5.5b last week.

Let's take a closer look to see what the different types of shareholders can tell us about V-Guard Industries.

See our latest analysis for V-Guard Industries

What Does The Institutional Ownership Tell Us About V-Guard Industries?

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 V-Guard Industries 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. 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 V-Guard Industries' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in V-Guard Industries. Looking at our data, we can see that the largest shareholder is the CEO Mithun Chittilappilly with 25% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 14% and 8.7%, of the shares outstanding, respectively. Interestingly, the second-largest shareholder, Kochouseph Chittilappilly is also Top Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

On looking further, we found that 55% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of V-Guard Industries

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

It seems that insiders own more than half the V-Guard Industries Limited stock. This gives them a lot of power. Insiders own ₹86b worth of shares in the ₹162b company. That's extraordinary! Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 10% 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 Equity Ownership

With a stake of 5.0%, private equity firms could influence the V-Guard Industries board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

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. Be aware that V-Guard Industries 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.