What Kind Of Investors Own Most Of The Bombay Dyeing and Manufacturing Company Limited (NSE:BOMDYEING)?

The big shareholder groups in The Bombay Dyeing and Manufacturing Company Limited (NSE:BOMDYEING) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Companies that used to be publicly owned tend to have lower insider ownership.

Bombay Dyeing and Manufacturing is a smaller company with a market capitalization of ₹17b, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutions are noticeable on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about Bombay Dyeing and Manufacturing.

View our latest analysis for Bombay Dyeing and Manufacturing

What Does The Institutional Ownership Tell Us About Bombay Dyeing and Manufacturing?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Bombay Dyeing and Manufacturing. 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. 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 Bombay Dyeing and Manufacturing's earnings history below. Of course, the future is what really matters.

Bombay Dyeing and Manufacturing is not owned by hedge funds. Our data shows that The Bombay Burmah Trading Corporation, Limited is the largest shareholder with 41% of shares outstanding. Ben Nevis Investments Ltd is the second largest shareholder owning 5.0% of common stock, and Life Insurance Corporation of India, Asset Management Arm holds about 3.2% of the company stock.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Bombay Dyeing and Manufacturing

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Shareholders would probably be interested to learn that insiders own shares in The Bombay Dyeing and Manufacturing Company Limited. As individuals, the insiders collectively own ₹364m worth of the ₹17b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

With a 40% ownership, the general public have some degree of sway over Bombay Dyeing and Manufacturing. 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 8.9%, of the Bombay Dyeing and Manufacturing stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

We can see that public companies hold 42% of the Bombay Dyeing and Manufacturing shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Bombay Dyeing and Manufacturing better, we need to consider many other factors. Take risks for example - Bombay Dyeing and Manufacturing has 1 warning sign we think 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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