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- NSEI:NIITLTD
Despite selling recently, NIIT Limited (NSE:NIITLTD) insiders own 42% stake and recent decline might have cost them
Key Insights
- NIIT's significant insider ownership suggests inherent interests in company's expansion
- 51% of the business is held by the top 4 shareholders
- Recent sales by insiders
To get a sense of who is truly in control of NIIT Limited (NSE:NIITLTD), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 42% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Despite selling some shares recently, insiders control a good portion of the company's stock. As market cap fell to ₹22b 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 NIIT, beginning with the chart below.
View our latest analysis for NIIT
What Does The Institutional Ownership Tell Us About NIIT?
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.
NIIT already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 NIIT's earnings history below. Of course, the future is what really matters.
Hedge funds don't have many shares in NIIT. From our data, we infer that the largest shareholder is Vijay Thadani (who also holds the title of Top Key Executive) with 18% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. Rajendra Pawar is the second largest shareholder owning 18% of common stock, and Nippon Life India Asset Management Limited holds about 8.2% of the company stock. Interestingly, the second-largest shareholder, Rajendra Pawar is also Top Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.
To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of NIIT
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.
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 insiders own a significant proportion of NIIT Limited. Insiders own ₹9.2b worth of shares in the ₹22b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 29% stake in NIIT. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Private Equity Ownership
Private equity firms hold a 5.7% stake in NIIT. This suggests they can be influential in key policy decisions. 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.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand NIIT better, we need to consider many other factors. For instance, we've identified 4 warning signs for NIIT (1 doesn't sit too well with us) that you should be aware of.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.
Valuation is complex, but we're here to simplify it.
Discover if NIIT might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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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.
About NSEI:NIITLTD
NIIT
Engages in providing learning and knowledge solutions to individuals, enterprises, and various institutions worldwide.
High growth potential with excellent balance sheet.