Garware Technical Fibres Limited's (NSE:GARFIBRES) largest shareholders are private companies who were rewarded as market cap surged ₹5.2b last week

Key Insights

• Significant control over Garware Technical Fibres by private companies implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 8 shareholders
• Institutional ownership in Garware Technical Fibres is 15%

If you want to know who really controls Garware Technical Fibres Limited (NSE:GARFIBRES), then you'll have to look at the makeup of its share registry. We can see that private companies own the lion's share in the company with 47% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, private companies were the biggest beneficiaries of last week’s 5.7% gain.

In the chart below, we zoom in on the different ownership groups of Garware Technical Fibres.

See our latest analysis for Garware Technical Fibres

What Does The Institutional Ownership Tell Us About Garware Technical Fibres?

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.

We can see that Garware Technical Fibres 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Garware Technical Fibres, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Garware Technical Fibres. Looking at our data, we can see that the largest shareholder is Garware Capital Markets Ltd. with 18% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.2% and 5.1% of the stock. Vayu Garware, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Garware Technical Fibres

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

We can see that insiders own shares in Garware Technical Fibres Limited. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around ₹7.1b worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 29% stake in Garware Technical Fibres. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 47%, of the shares on issue. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Garware Technical Fibres better, we need to consider many other factors. Take risks for example - Garware Technical Fibres has 1 warning sign we think you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.