State or government among Indian Railway Catering & Tourism Corporation Limited's (NSE:IRCTC) largest stockholders and were hit after last week's 4.2% price drop

Key Insights

• Significant control over Indian Railway Catering & Tourism by state or government implies that the general public has more power to influence management and governance-related decisions
• 62% of the company is held by a single shareholder (India)
• Institutional ownership in Indian Railway Catering & Tourism is 16%

A look at the shareholders of Indian Railway Catering & Tourism Corporation Limited (NSE:IRCTC) can tell us which group is most powerful. With 63% stake, state or government possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, state or government endured the biggest losses as the stock fell by 4.2%.

Let's take a closer look to see what the different types of shareholders can tell us about Indian Railway Catering & Tourism.

Check out our latest analysis for Indian Railway Catering & Tourism

What Does The Institutional Ownership Tell Us About Indian Railway Catering & Tourism?

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.

As you can see, institutional investors have a fair amount of stake in Indian Railway Catering & Tourism. 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. 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 Indian Railway Catering & Tourism's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Indian Railway Catering & Tourism. The company's largest shareholder is India, with ownership of 62%. This implies that they have majority interest control of the future of the company. In comparison, the second and third largest shareholders hold about 10% and 1.0% of the stock.

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. 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 Indian Railway Catering & Tourism

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our data suggests that insiders own under 1% of Indian Railway Catering & Tourism Corporation Limited in their own names. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own ₹2.4m worth of shares. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Indian Railway Catering & Tourism. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Indian Railway Catering & Tourism (of which 1 doesn't sit too well with us!) 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.