Cholamandalam Investment and Finance Company Limited's (NSE:CHOLAFIN) market cap touched ₹609b last week, benefiting both public companies who own 45% as well as institutions

A look at the shareholders of Cholamandalam Investment and Finance Company Limited (NSE:CHOLAFIN) can tell us which group is most powerful. The group holding the most number of shares in the company, around 45% to be precise, is public companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While public companies were the group that reaped the most benefits after last week’s 4.8% price gain, institutions also received a 32% cut.

Let's delve deeper into each type of owner of Cholamandalam Investment and Finance, beginning with the chart below.

Check out our latest analysis for Cholamandalam Investment and Finance

What Does The Institutional Ownership Tell Us About Cholamandalam Investment and Finance?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Cholamandalam Investment and Finance. 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 Cholamandalam Investment and Finance's earnings history below. Of course, the future is what really matters.

Cholamandalam Investment and Finance is not owned by hedge funds. The company's largest shareholder is Cholamandalam Financial Holdings Limited, with ownership of 45%. With 4.3% and 4.1% of the shares outstanding respectively, Axis Asset Management Company Limited and Murugappa Group Ltd. are the second and third largest shareholders.

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 54% 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Cholamandalam Investment and Finance

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.

Our most recent data indicates that insiders own some shares in Cholamandalam Investment and Finance Company Limited. The insiders have a meaningful stake worth ₹8.7b. we sometimes take an interest in whether they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 16% stake in the company, and hence can't easily be ignored. 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 4.9%, 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.

Public Company Ownership

Public companies currently own 45% of Cholamandalam Investment and Finance 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Cholamandalam Investment and Finance better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Cholamandalam Investment and Finance (of which 1 can't be ignored!) you should know about.

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.

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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.