Kalyan Jewellers India Limited (NSE:KALYANKJIL) insiders have significant skin in the game with 61% ownership

Key Insights

• Kalyan Jewellers India's significant insider ownership suggests inherent interests in company's expansion
• The top 3 shareholders own 60% of the company
• Institutions own 22% of Kalyan Jewellers India

To get a sense of who is truly in control of Kalyan Jewellers India Limited (NSE:KALYANKJIL), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 61% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

So it follows, every decision made by insiders of Kalyan Jewellers India regarding the company's future would be crucial to them.

Let's take a closer look to see what the different types of shareholders can tell us about Kalyan Jewellers India.

Check out our latest analysis for Kalyan Jewellers India

What Does The Institutional Ownership Tell Us About Kalyan Jewellers India?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Kalyan Jewellers India 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Kalyan Jewellers India's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Kalyan Jewellers India. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Kalyan Jewellers India's case, its Senior Key Executive, Seetharama Iyer Kalyanaraman, is the largest shareholder, holding 24% of shares outstanding. The second and third largest shareholders are Ramesh Kalyanaraman and Seetharam Kalyanaraman, with an equal amount of shares to their name at 18%. Interestingly, the second and third-largest shareholders also happen to be the Senior Key Executive and Member of the Board of Directors, respectively. This once again signifies considerable insider ownership amongst the company's top shareholders.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 60% stake.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Kalyan Jewellers India

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems that insiders own more than half the Kalyan Jewellers India Limited stock. This gives them a lot of power. Insiders own ₹456b worth of shares in the ₹753b company. That's extraordinary! Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 13% 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 1 warning sign for Kalyan Jewellers India you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.