Private companies invested in Renaissance Global Limited (NSE:RGL) up 10% last week, insiders too were rewarded

Key Insights

• Significant control over Renaissance Global by private companies implies that the general public has more power to influence management and governance-related decisions
• 53% of the business is held by the top 4 shareholders
• Insiders have been selling lately

Every investor in Renaissance Global Limited (NSE:RGL) should be aware of the most powerful shareholder groups. With 52% stake, private companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While private companies were the group that benefitted the most from last week’s ₹1.3b market cap gain, insiders too had a 27% share in those profits.

In the chart below, we zoom in on the different ownership groups of Renaissance Global.

Check out our latest analysis for Renaissance Global

What Does The Lack Of Institutional Ownership Tell Us About Renaissance Global?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Renaissance Global, for yourself, below.

We note that hedge funds don't have a meaningful investment in Renaissance Global. Our data shows that Anived Family Trust is the largest shareholder with 21% of shares outstanding. Kothari Descendents Private Trust is the second largest shareholder owning 14% of common stock, and Niranjan Family Private Trust holds about 13% of the company stock. In addition, we found that Sumit Shah, the CEO has 4.0% of the shares allocated to their name.

On looking further, we found that 53% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in 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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Renaissance Global

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.

Our most recent data indicates that insiders own a reasonable proportion of Renaissance Global Limited. Insiders own ₹3.8b worth of shares in the ₹14b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 20% 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

It seems that Private Companies own 52%, of the Renaissance Global stock. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Renaissance Global is showing 3 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.