Filatex Fashions Limited's (NSE:FILATFASH) most bullish insider is CEO Prabhat Sethia, and their holdings value went up by 16% last week

Key Insights

• Significant insider control over Filatex Fashions implies vested interests in company growth
• The top 8 shareholders own 51% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

To get a sense of who is truly in control of Filatex Fashions Limited (NSE:FILATFASH), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 62% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit ₹23b market cap following a 16% gain in the stock.

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

Check out our latest analysis for Filatex Fashions

What Does The Lack Of Institutional Ownership Tell Us About Filatex Fashions?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Filatex Fashions' earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Filatex Fashions is not owned by hedge funds. With a 25% stake, CEO Prabhat Sethia is the largest shareholder. In comparison, the second and third largest shareholders hold about 6.0% and 4.2% of the stock.

We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. 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 Filatex Fashions

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.

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.

It seems that insiders own more than half the Filatex Fashions Limited stock. This gives them a lot of power. That means they own ₹14b worth of shares in the ₹23b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 31% stake in the company, and hence can't easily be ignored. 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

It appears to us that public companies own 6.0% of Filatex Fashions. 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 Filatex Fashions better, we need to consider many other factors. For instance, we've identified 2 warning signs for Filatex Fashions that you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.