Private companies are Centrum Capital Limited's (NSE:CENTRUM) biggest owners and were rewarded after market cap rose by ₹1.7b last week

Key Insights

• The considerable ownership by private companies in Centrum Capital indicates that they collectively have a greater say in management and business strategy
• A total of 3 investors have a majority stake in the company with 51% ownership
• 13% of Centrum Capital is held by insiders

We've discovered 2 warning signs about Centrum Capital. View them for free.

If you want to know who really controls Centrum Capital Limited (NSE:CENTRUM), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 60% to be precise, is private companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, private companies collectively scored the highest last week as the company hit ₹12b market cap following a 17% gain in the stock.

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

View our latest analysis for Centrum Capital

What Does The Lack Of Institutional Ownership Tell Us About Centrum Capital?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Centrum Capital might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

We note that hedge funds don't have a meaningful investment in Centrum Capital. Businessmatch Services India Pvt Ltd is currently the company's largest shareholder with 32% of shares outstanding. In comparison, the second and third largest shareholders hold about 13% and 6.2% of the stock.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Centrum Capital

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.

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.

It seems insiders own a significant proportion of Centrum Capital Limited. Insiders have a ₹1.5b stake in this ₹12b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 27% stake in Centrum Capital. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 60%, 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 Centrum Capital better, we need to consider many other factors. Be aware that Centrum Capital is showing 2 warning signs in our investment analysis , and 1 of those is a bit concerning...

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.