Insiders own 43% of Safari Industries (India) Limited (NSE:SAFARI) in spite of selling recently and the recent dip may have hurt them

Key Insights

• Insiders appear to have a vested interest in Safari Industries (India)'s growth, as seen by their sizeable ownership
• The top 3 shareholders own 51% of the company
• Insiders have been selling lately

To get a sense of who is truly in control of Safari Industries (India) Limited (NSE:SAFARI), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 43% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Despite selling some shares recently, insiders control a good portion of the company's stock. As market cap fell to ₹107b last week, they would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Safari Industries (India), beginning with the chart below.

See our latest analysis for Safari Industries (India)

What Does The Institutional Ownership Tell Us About Safari Industries (India)?

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.

As you can see, institutional investors have a fair amount of stake in Safari Industries (India). 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 Safari Industries (India), (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Safari Industries (India). The company's CEO Sudhir Jatia is the largest shareholder with 37% of shares outstanding. Safari Commercial LLP is the second largest shareholder owning 8.6% of common stock, and Malabar Investments, LLC holds about 5.4% of the company stock.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Safari Industries (India)

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 Safari Industries (India) Limited. Insiders own ₹46b worth of shares in the ₹107b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 14% 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 Equity Ownership

With a stake of 5.4%, private equity firms could influence the Safari Industries (India) board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

It seems that Private Companies own 8.6%, of the Safari Industries (India) stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Safari Industries (India) has 2 warning signs we think you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

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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.