Could The Rajesh Exports Limited (NSE:RAJESHEXPO) Ownership Structure Tell Us Something Useful?

By
Simply Wall St
Published
May 31, 2021
NSEI:RAJESHEXPO
Source: Shutterstock

The big shareholder groups in Rajesh Exports Limited (NSE:RAJESHEXPO) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

Rajesh Exports isn't enormous, but it's not particularly small either. It has a market capitalization of ₹153b, which means it would generally expect to see some institutions on the share registry. Taking a look at our data on the ownership groups (below), it seems that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about Rajesh Exports.

View our latest analysis for Rajesh Exports

ownership-breakdown
NSEI:RAJESHEXPO Ownership Breakdown June 1st 2021

What Does The Institutional Ownership Tell Us About Rajesh Exports?

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 Rajesh Exports. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Rajesh Exports, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NSEI:RAJESHEXPO Earnings and Revenue Growth June 1st 2021

Rajesh Exports is not owned by hedge funds. Our data suggests that Rajesh Mehta, who is also the company's Top Key Executive, holds the most number of shares at 30%. 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. Prashant Mehta is the second largest shareholder owning 13% of common stock, and Bridge India Fund holds about 9.7% of the company stock. Interestingly, the second-largest shareholder, Prashant Mehta is also Chief Executive Officer, again, pointing towards strong 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 52% 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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Rajesh Exports

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 Rajesh Exports Limited stock. This gives them a lot of power. Given it has a market cap of ₹153b, that means insiders have a whopping ₹94b worth of shares in their own names. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

With a 11% ownership, the general public have some degree of sway over Rajesh Exports. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 1 warning sign for Rajesh Exports that you should be aware of before investing here.

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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