Despite selling recently, Goldiam International Limited (NSE:GOLDIAM) insiders own 66% stake and recent decline might have cost them

Key Insights

• Significant insider control over Goldiam International implies vested interests in company growth
• 57% of the business is held by the top 2 shareholders
• Insiders have been selling lately

To get a sense of who is truly in control of Goldiam International Limited (NSE:GOLDIAM), 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 66% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Despite selling some shares recently, insiders control a good portion of the company's stock. As a result, the group bore the brunt of last week’s ₹9.2b market cap loss.

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

See our latest analysis for Goldiam International

What Does The Lack Of Institutional Ownership Tell Us About Goldiam International?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. Alternatively, there might be something about the company that has kept institutional investors away. Goldiam International's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Hedge funds don't have many shares in Goldiam International. Our data suggests that Rashesh Bhansali, who is also the company's Top Key Executive, holds the most number of shares at 41%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. In comparison, the second and third largest shareholders hold about 16% and 5.0% of the stock. Interestingly, the second-largest shareholder, Anmol Bhansali is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence 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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Goldiam International

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our information suggests that insiders own more than half of Goldiam International Limited. This gives them effective control of the company. That means they own ₹31b worth of shares in the ₹47b company. That's quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 32% 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Goldiam International better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Goldiam International (of which 2 are a bit concerning!) you should know about.

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.