VL E-Governance & IT Solutions Limited's (NSE:VLEGOV) largest shareholders are individual investors who were rewarded as market cap surged ₹1.3b last week

Key Insights

• VL E-Governance & IT Solutions' significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 21 shareholders own 48% of the company
• Institutions own 11% of VL E-Governance & IT Solutions

If you want to know who really controls VL E-Governance & IT Solutions Limited (NSE:VLEGOV), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 52% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, individual investors benefitted the most after the company's market cap rose by ₹1.3b last week.

Let's delve deeper into each type of owner of VL E-Governance & IT Solutions, beginning with the chart below.

View our latest analysis for VL E-Governance & IT Solutions

What Does The Institutional Ownership Tell Us About VL E-Governance & IT 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.

VL E-Governance & IT Solutions already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 VL E-Governance & IT Solutions' historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in VL E-Governance & IT Solutions. Vakrangee Holdings Private Limited is currently the company's largest shareholder with 24% of shares outstanding. Life Insurance Corporation of India, Asset Management Arm is the second largest shareholder owning 6.2% of common stock, and NJD Capital Private Limited holds about 5.8% of the company stock. Furthermore, CEO Dinesh Nandwana is the owner of 3.7% of the company's shares.

Our studies suggest that the top 21 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of VL E-Governance & IT Solutions

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

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.

Shareholders would probably be interested to learn that insiders own shares in VL E-Governance & IT Solutions Limited. It has a market capitalization of just ₹11b, and insiders have ₹830m worth of shares, in their own names. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 52% stake in VL E-Governance & IT Solutions, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

It seems that Private Companies own 29%, of the VL E-Governance & IT Solutions stock. 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. For instance, we've identified 3 warning signs for VL E-Governance & IT Solutions (1 is potentially serious) that you should be aware of.

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.