In spite of recent selling, insiders still control 64% of Avenue Supermarts Limited (NSE:DMART)

Key Insights

• Significant insider control over Avenue Supermarts implies vested interests in company growth
• 52% of the business is held by the top 2 shareholders
• Insiders have been selling lately

If you want to know who really controls Avenue Supermarts Limited (NSE:DMART), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 64% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Even though insiders have sold shares recently, the group owns the most numbers of shares in the company.

Let's take a closer look to see what the different types of shareholders can tell us about Avenue Supermarts.

View our latest analysis for Avenue Supermarts

What Does The Institutional Ownership Tell Us About Avenue Supermarts?

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 Avenue Supermarts 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. 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 Avenue Supermarts' historic earnings and revenue below, but keep in mind there's always more to the story.

Avenue Supermarts is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Manjri Chandak with 38% of shares outstanding. In comparison, the second and third largest shareholders hold about 14% and 7.2% of the stock. In addition, we found that Ignatius Noronha, the CEO has 2.0% of the shares allocated to their name.

After doing some more digging, we found that the top 2 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 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 Avenue Supermarts

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 information suggests that insiders own more than half of Avenue Supermarts Limited. This gives them effective control of the company. Insiders own ₹1.6t worth of shares in the ₹2.5t company. That's extraordinary! Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 11% 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 14%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

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

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.