eMudhra Limited's (NSE:EMUDHRA) CEO Venkatraman Srinivasan is the most upbeat insider, and their holdings increased by 8.5% last week

Key Insights

• Insiders appear to have a vested interest in eMudhra's growth, as seen by their sizeable ownership
• A total of 2 investors have a majority stake in the company with 51% ownership
• Institutional ownership in eMudhra is 14%

Every investor in eMudhra Limited (NSE:EMUDHRA) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 50% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit ₹71b market cap following a 8.5% gain in the stock.

In the chart below, we zoom in on the different ownership groups of eMudhra.

See our latest analysis for eMudhra

What Does The Institutional Ownership Tell Us About eMudhra?

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.

We can see that eMudhra does have institutional investors; and they hold a good portion of the company's stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at eMudhra's earnings history below. Of course, the future is what really matters.

eMudhra is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Venkatraman Srinivasan with 34% of shares outstanding. For context, the second largest shareholder holds about 17% of the shares outstanding, followed by an ownership of 7.0% by the third-largest shareholder.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 51% stake.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of eMudhra

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.

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 information suggests that insiders maintain a significant holding in eMudhra Limited. Insiders own ₹35b worth of shares in the ₹71b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 15% ownership, the general public, mostly comprising of individual investors, have some degree of sway over eMudhra. 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.

Private Company Ownership

Our data indicates that Private Companies hold 19%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that eMudhra is showing 1 warning sign in our investment analysis , you should know about...

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.