With 64% ownership in Avenue Supermarts Limited (NSE:DMART), insiders continue to have the largest holding even though they have sold shares recently

Key Insights

• Avenue Supermarts' significant insider ownership suggests inherent interests in company's expansion
• A total of 2 investors have a majority stake in the company with 52% ownership
• Insiders have been selling lately

To get a sense of who is truly in control of Avenue Supermarts Limited (NSE:DMART), it is important to understand the ownership structure of the business. 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.

Despite selling some shares recently, insiders control a good portion of the company's stock.

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

See 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 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 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. For context, the second largest shareholder holds about 14% of the shares outstanding, followed by an ownership of 7.2% by the third-largest shareholder. In addition, we found that Ignatius Noronha, the CEO has 2.0% of the shares allocated to their name.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Avenue Supermarts

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.

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.

It seems that insiders own more than half the Avenue Supermarts Limited stock. This gives them a lot of power. That means insiders have a very meaningful ₹2.1t stake in this ₹3.3t business. 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

With a 10% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Avenue Supermarts. 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

We can see that Private Companies own 14%, 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 Avenue Supermarts better, we need to consider many other factors. Take risks for example - Avenue Supermarts has 1 warning sign 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com