eClerx Services Limited (NSE:ECLERX) Top Key Executive Priyadarshan Mundhra's holdings dropped 4.2% in value as a result of the recent pullback

Key Insights

• Significant insider control over eClerx Services implies vested interests in company growth
• The top 2 shareholders own 55% of the company
• Institutions own 31% of eClerx Services

Every investor in eClerx Services Limited (NSE:ECLERX) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 56% ownership. 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, insiders as a group endured the highest losses after market cap fell by ₹6.2b.

Let's take a closer look to see what the different types of shareholders can tell us about eClerx Services.

Check out our latest analysis for eClerx Services

What Does The Institutional Ownership Tell Us About eClerx Services?

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.

eClerx Services already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 eClerx Services, (below). Of course, keep in mind that there are other factors to consider, too.

eClerx Services is not owned by hedge funds. From our data, we infer that the largest shareholder is Priyadarshan Mundhra (who also holds the title of Top Key Executive) with 28% 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 28% and 10.0% of the shares outstanding respectively, Anjan Malik and HDFC Asset Management Company Limited are the second and third largest shareholders. Interestingly, the second-largest shareholder, Anjan Malik is also Top Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of eClerx Services

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our information suggests that insiders own more than half of eClerx Services Limited. This gives them effective control of the company. That means insiders have a very meaningful ₹79b stake in this ₹142b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public, who are usually individual investors, hold a 12% stake in eClerx Services. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand eClerx Services better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.