Stock Analysis

Raymond Limited's (NSE:RAYMOND) largest shareholders are private companies who were rewarded as market cap surged ₹4.6b last week

Published
NSEI:RAYMOND
Source: Shutterstock

A look at the shareholders of Raymond Limited (NSE:RAYMOND) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 49% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private companies collectively scored the highest last week as the company hit ₹91b market cap following a 5.3% gain in the stock.

Let's delve deeper into each type of owner of Raymond, beginning with the chart below.

Our analysis indicates that RAYMOND is potentially undervalued!

ownership-breakdown
NSEI:RAYMOND Ownership Breakdown December 1st 2022

What Does The Institutional Ownership Tell Us About Raymond?

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.

We can see that Raymond does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Raymond's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NSEI:RAYMOND Earnings and Revenue Growth December 1st 2022

Raymond is not owned by hedge funds. J K Investors (Bombay) Ltd. is currently the largest shareholder, with 48% of shares outstanding. In comparison, the second and third largest shareholders hold about 2.4% and 2.0% of the stock.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 Raymond

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. 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.

We can report that insiders do own shares in Raymond Limited. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around ₹1.7b worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 35% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 49%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Raymond better, we need to consider many other factors. Be aware that Raymond is showing 2 warning signs in our investment analysis , you should know about...

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

Valuation is complex, but we're helping make it simple.

Find out whether Raymond is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis