Stock Analysis

Alldigi Tech Limited's (NSE:ALLDIGI) last week's 12% decline must have disappointed public companies who have a significant stake

Published
NSEI:ALLDIGI

Key Insights

  • Alldigi Tech's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
  • Quess Corp Limited owns 73% of the company
  • Insiders have been buying lately

If you want to know who really controls Alldigi Tech Limited (NSE:ALLDIGI), then you'll have to look at the makeup of its share registry. We can see that public companies own the lion's share in the company with 73% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, public companies as a group endured the highest losses last week after market cap fell by ₹2.0b.

Let's delve deeper into each type of owner of Alldigi Tech, beginning with the chart below.

See our latest analysis for Alldigi Tech

NSEI:ALLDIGI Ownership Breakdown October 26th 2024

What Does The Lack Of Institutional Ownership Tell Us About Alldigi Tech?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. Alternatively, there might be something about the company that has kept institutional investors away. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Alldigi Tech, for yourself, below.

NSEI:ALLDIGI Earnings and Revenue Growth October 26th 2024

Alldigi Tech is not owned by hedge funds. The company's largest shareholder is Quess Corp Limited, with ownership of 73%. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. For context, the second largest shareholder holds about 1.6% of the shares outstanding, followed by an ownership of 1.3% by the third-largest shareholder.

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

Insider Ownership Of Alldigi Tech

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. 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.

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 Alldigi Tech Limited. As individuals, the insiders collectively own ₹943m worth of the ₹15b company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 19% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

It appears to us that public companies own 73% of Alldigi Tech. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Alldigi Tech better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Alldigi Tech .

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.