Private companies own 31% of EIH Limited (NSE:EIHOTEL) shares but public companies control 33% of the company

Key Insights

• EIH's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 3 shareholders own 50% of the company
• 20% of EIH is held by Institutions

To get a sense of who is truly in control of EIH Limited (NSE:EIHOTEL), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 33% to be precise, is public companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Private companies, on the other hand, account for 31% of the company's stockholders.

Let's delve deeper into each type of owner of EIH, beginning with the chart below.

View our latest analysis for EIH

What Does The Institutional Ownership Tell Us About EIH?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that EIH does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at EIH's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in EIH. Reliance Industries Limited is currently the company's largest shareholder with 19% of shares outstanding. With 18% and 14% of the shares outstanding respectively, The Oberoi Group and ITC Limited are the second and third largest shareholders. In addition, we found that Vikramjit Oberoi, the CEO has 0.9% of the shares allocated to their name.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 50% stake.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of EIH

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. 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 some shares in EIH Limited. The insiders have a meaningful stake worth ₹11b. Most would see this as a real positive. It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 11% stake in EIH. 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 31%, of the company's shares. 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.

Public Company Ownership

We can see that public companies hold 33% of the EIH shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 1 warning sign for EIH that you should be aware of before investing here.

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.