public companies who own 54% along with institutions invested in Firstsource Solutions Limited (NSE:FSL) saw increase in their holdings value last week

Key Insights

• Significant control over Firstsource Solutions by public companies implies that the general public has more power to influence management and governance-related decisions
• The largest shareholder of the company is RPSG Ventures Limited with a 54% stake
• Insiders have sold recently

A look at the shareholders of Firstsource Solutions Limited (NSE:FSL) can tell us which group is most powerful. The group holding the most number of shares in the company, around 54% to be precise, is public companies. Put another way, the group faces the maximum upside potential (or downside risk).

Public companies gained the most after market cap touched ₹253b last week, while institutions who own 27% also benefitted.

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

See our latest analysis for Firstsource Solutions

What Does The Institutional Ownership Tell Us About Firstsource Solutions?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Firstsource Solutions does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Firstsource Solutions, (below). Of course, keep in mind that there are other factors to consider, too.

Firstsource Solutions is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is RPSG Ventures Limited with 54% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Meanwhile, the second and third largest shareholders, hold 9.2% and 1.9%, of the shares outstanding, respectively.

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 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 Firstsource Solutions

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 most recent data indicates that insiders own less than 1% of Firstsource Solutions Limited. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own ₹1.2b worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 17% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Firstsource Solutions. 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.

Public Company Ownership

Public companies currently own 54% of Firstsource Solutions stock. 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. For instance, we've identified 3 warning signs for Firstsource Solutions that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.