Himatsingka Seide Limited's (NSE:HIMATSEIDE) 21% gain last week benefited both retail investors who own 39% as well as insiders

Key Insights

• Significant control over Himatsingka Seide by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 9 shareholders own 52% of the company
• Insider ownership in Himatsingka Seide is 24%

Every investor in Himatsingka Seide Limited (NSE:HIMATSEIDE) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 39% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Retail investors gained the most after market cap touched ₹17b last week, while insiders who own 24% also benefitted.

In the chart below, we zoom in on the different ownership groups of Himatsingka Seide.

See our latest analysis for Himatsingka Seide

What Does The Institutional Ownership Tell Us About Himatsingka Seide?

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.

As you can see, institutional investors have a fair amount of stake in Himatsingka Seide. 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. 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 Himatsingka Seide's historic earnings and revenue below, but keep in mind there's always more to the story.

It looks like hedge funds own 6.8% of Himatsingka Seide shares. 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. From our data, we infer that the largest shareholder is Dinesh Himatsingka (who also holds the title of Top Key Executive) with 14% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. The second and third largest shareholders are Shrikant Himatsingka and Abakkus Asset Manager LLP, with an equal amount of shares to their name at 6.8%. Interestingly, the second-largest shareholder, Shrikant Himatsingka is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 9 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 a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Himatsingka Seide

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 insiders own a significant proportion of Himatsingka Seide Limited. Insiders own ₹4.2b worth of shares in the ₹17b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 39% stake in Himatsingka Seide. 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.

Private Company Ownership

Our data indicates that Private Companies hold 16%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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 Himatsingka Seide is showing 2 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

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.