Central Depository Services (India) Limited's (NSE:CDSL) 4.1% loss last week hit both individual investors who own 50% as well as institutions

Key Insights

• Significant control over Central Depository Services (India) by individual investors implies that the general public has more power to influence management and governance-related decisions
• 49% of the business is held by the top 25 shareholders
• Institutions own 34% of Central Depository Services (India)

Every investor in Central Depository Services (India) Limited (NSE:CDSL) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 50% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 4.1% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 34% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of Central Depository Services (India).

View our latest analysis for Central Depository Services (India)

What Does The Institutional Ownership Tell Us About Central Depository Services (India)?

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.

Central Depository Services (India) already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Central Depository Services (India), (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Central Depository Services (India). Our data shows that BSE Limited is the largest shareholder with 15% of shares outstanding. With 7.2% and 4.6% of the shares outstanding respectively, Standard Chartered Bank, Asset Management Arm and PPFAS Asset Management Private Limited are the second and third largest shareholders.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Central Depository Services (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.

We note our data does not show any board members holding shares, personally. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.

General Public Ownership

The general public-- including retail investors -- own 50% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

Public companies currently own 17% of Central Depository Services (India) stock. 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. Take risks for example - Central Depository Services (India) has 1 warning sign we think you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.