Indo Rama Synthetics (India)'s Market Cap Drops To ₹11b Leaving Insiders With Losses

The recent 17% drop in Indo Rama Synthetics (India) Limited's (NSE:INDORAMA) stock could come as a blow to insiders who purchased ₹2.63b worth of stock at an average buy price of ₹49.15 over the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth ₹2.19b which is not ideal.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Indo Rama Synthetics (India)

Indo Rama Synthetics (India) Insider Transactions Over The Last Year

The insider Aradhna Lohia made the biggest insider purchase in the last 12 months. That single transaction was for ₹2.6b worth of shares at a price of ₹49.15 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being ₹40.90). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. The only individual insider to buy over the last year was Aradhna Lohia.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Indo Rama Synthetics (India) is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Indo Rama Synthetics (India) insiders own 43% of the company, worth about ₹4.6b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Indo Rama Synthetics (India) Tell Us?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Indo Rama Synthetics (India) insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

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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.