Private companies who hold 35% of Monte Carlo Fashions Limited (NSE:MONTECARLO) gained 10%, institutions profited as well

Key Insights

• The considerable ownership by private companies in Monte Carlo Fashions indicates that they collectively have a greater say in management and business strategy
• The top 2 shareholders own 56% of the company
• Insiders own 11% of Monte Carlo Fashions

Every investor in Monte Carlo Fashions Limited (NSE:MONTECARLO) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 35% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

Private companies gained the most after market cap touched ₹20b last week, while institutions who own 27% also benefitted.

In the chart below, we zoom in on the different ownership groups of Monte Carlo Fashions.

View our latest analysis for Monte Carlo Fashions

What Does The Institutional Ownership Tell Us About Monte Carlo Fashions?

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.

Monte Carlo Fashions already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Monte Carlo Fashions, (below). Of course, keep in mind that there are other factors to consider, too.

Monte Carlo Fashions is not owned by hedge funds. Girnar Investment Ltd is currently the largest shareholder, with 32% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 24% and 8.0%, of the shares outstanding, respectively. Additionally, the company's CEO Jawahar Oswal directly holds 0.5% of the total shares outstanding.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Monte Carlo Fashions

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our most recent data indicates that insiders own a reasonable proportion of Monte Carlo Fashions Limited. Insiders own ₹2.1b worth of shares in the ₹20b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 20% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 35%, of the shares on issue. 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.

Public Company Ownership

We can see that public companies hold 8.0% of the Monte Carlo Fashions shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Monte Carlo Fashions better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Monte Carlo Fashions you should be aware of, and 1 of them is concerning.

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.