Private companies who hold 49% of CSL Finance Limited (NSE:CSLFINANCE) gained 20%, insiders profited as well

Key Insights

• The considerable ownership by private companies in CSL Finance indicates that they collectively have a greater say in management and business strategy
• 56% of the business is held by the top 3 shareholders
• 29% of CSL Finance is held by insiders

A look at the shareholders of CSL Finance Limited (NSE:CSLFINANCE) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 49% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While private companies were the group that reaped the most benefits after last week’s 20% price gain, insiders also received a 29% cut.

Let's take a closer look to see what the different types of shareholders can tell us about CSL Finance.

View our latest analysis for CSL Finance

What Does The Institutional Ownership Tell Us About CSL 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 CSL Finance. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see CSL Finance's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in CSL Finance. The company's largest shareholder is CSL Capital Private Limited, with ownership of 30%. With 18% and 7.6% of the shares outstanding respectively, Rohit Gupta and Kitara PIIN 1103 are the second and third largest shareholders. Rohit Gupta, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of CSL 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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders maintain a significant holding in CSL Finance Limited. It has a market capitalization of just ₹11b, and insiders have ₹3.1b worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

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

Our data indicates that Private Companies hold 49%, 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand CSL Finance better, we need to consider many other factors. Take risks for example - CSL Finance has 5 warning signs (and 2 which shouldn't be ignored) we think you should know about.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.