Insiders still control 43% of Safari Industries (India) Limited (NSE:SAFARI) despite recent sales

Key Insights

• Insiders appear to have a vested interest in Safari Industries (India)'s growth, as seen by their sizeable ownership
• A total of 3 investors have a majority stake in the company with 50% ownership
• Insiders have sold recently

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Every investor in Safari Industries (India) Limited (NSE:SAFARI) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 43% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Despite recent sales, insiders own the most shares in the company. As a result, they stand to gain the most after the stock gained 5.3% in the past week.

In the chart below, we zoom in on the different ownership groups of Safari Industries (India).

Check out our latest analysis for Safari Industries (India)

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

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Safari Industries (India) 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Safari Industries (India)'s historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Safari Industries (India). Looking at our data, we can see that the largest shareholder is the CEO Sudhir Jatia with 37% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.6% and 4.9%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Safari Industries (India)

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. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders maintain a significant holding in Safari Industries (India) Limited. It has a market capitalization of just ₹110b, and insiders have ₹47b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 16% stake in Safari Industries (India). 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

We can see that Private Companies own 8.6%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Safari Industries (India) better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.