Raymond Lifestyle Limited's (NSE:RAYMONDLSL) market cap surged ₹6.2b last week, private companies who have a lot riding on the company were rewarded

Key Insights

• Significant control over Raymond Lifestyle by private companies implies that the general public has more power to influence management and governance-related decisions
• 54% of the company is held by a single shareholder (J K Investors (Bombay) Ltd.)
• Institutional ownership in Raymond Lifestyle is 12%

If you want to know who really controls Raymond Lifestyle Limited (NSE:RAYMONDLSL), then you'll have to look at the makeup of its share registry. We can see that private companies own the lion's share in the company with 54% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, private companies benefitted the most after the company's market cap rose by ₹6.2b last week.

In the chart below, we zoom in on the different ownership groups of Raymond Lifestyle.

Check out our latest analysis for Raymond Lifestyle

What Does The Institutional Ownership Tell Us About Raymond Lifestyle?

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 Lifestyle 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 Raymond Lifestyle's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Raymond Lifestyle. Our data shows that J K Investors (Bombay) Ltd. is the largest shareholder with 54% of shares outstanding. This implies that they have majority interest control of the future of the company. UTI Asset Management Company Limited is the second largest shareholder owning 1.8% of common stock, and The Vanguard Group, Inc. holds about 1.7% of the company stock.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Raymond Lifestyle

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

We note our data does not show any board members holding shares, personally. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.

General Public Ownership

The general public-- including retail investors -- own 35% 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

Our data indicates that Private Companies hold 54%, 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:

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. Take risks for example - Raymond Lifestyle has 1 warning sign we think you should be aware of.

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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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.