Private companies invested in Bhartiya International Ltd. (NSE:BIL) copped the brunt of last week's ₹1.1b market cap decline

Key Insights

• Significant control over Bhartiya International by private companies implies that the general public has more power to influence management and governance-related decisions
• A total of 4 investors have a majority stake in the company with 51% ownership
• 20% of Bhartiya International is held by insiders

Every investor in Bhartiya International Ltd. (NSE:BIL) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 45% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While the holdings of private companies took a hit after last week’s 11% price drop, insiders with their 20% also suffered.

Let's delve deeper into each type of owner of Bhartiya International, beginning with the chart below.

Check out our latest analysis for Bhartiya International

What Does The Institutional Ownership Tell Us About Bhartiya International?

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 Bhartiya International does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Bhartiya International's historic earnings and revenue below, but keep in mind there's always more to the story.

Our data indicates that hedge funds own 5.8% of Bhartiya International. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Bhartiya Global Holding Pvt Ltd is currently the largest shareholder, with 25% of shares outstanding. For context, the second largest shareholder holds about 11% of the shares outstanding, followed by an ownership of 8.3% by the third-largest shareholder. Snehdeep Aggarwal, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.

On looking further, we found that 51% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. 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 Bhartiya International

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.

It seems insiders own a significant proportion of Bhartiya International Ltd.. Insiders have a ₹1.8b stake in this ₹9.1b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 20% stake in Bhartiya International. 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

It seems that Private Companies own 45%, of the Bhartiya International 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. Be aware that Bhartiya International is showing 2 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.