Fedbank Financial Services Limited's (NSE:FEDFINA) market cap surged ₹6.0b last week, public companies who have a lot riding on the company were rewarded

Key Insights

• Fedbank Financial Services' significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 61% of the company is held by a single shareholder (The Federal Bank Limited)
• Institutions own 11% of Fedbank Financial Services

Every investor in Fedbank Financial Services Limited (NSE:FEDFINA) should be aware of the most powerful shareholder groups. We can see that public companies own the lion's share in the company with 61% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, public companies collectively scored the highest last week as the company hit ₹41b market cap following a 17% gain in the stock.

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

View our latest analysis for Fedbank Financial Services

What Does The Institutional Ownership Tell Us About Fedbank Financial Services?

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.

Fedbank Financial Services already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Fedbank Financial Services, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Fedbank Financial Services. The company's largest shareholder is The Federal Bank Limited, with ownership of 61%. This implies that they have majority interest control of the future of the company. Meanwhile, the second and third largest shareholders, hold 8.7% and 2.5%, of the shares outstanding, respectively.

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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Fedbank Financial Services

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Fedbank Financial Services Limited. It has a market capitalization of just ₹41b, and insiders have ₹630m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 17% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Fedbank Financial Services. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 8.7% stake in Fedbank Financial Services. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Public Company Ownership

It appears to us that public companies own 61% of Fedbank Financial Services. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Fedbank Financial Services better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Fedbank Financial Services you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.