private equity firms who own 60% along with institutions invested in Fusion Finance Limited (NSE:FUSIONPP) saw increase in their holdings value last week

Key Insights

• The considerable ownership by private equity firms in Fusion Finance indicates that they collectively have a greater say in management and business strategy
• 60% of the business is held by the top 3 shareholders
• Institutions own 26% of Fusion Finance

Our free stock report includes 3 warning signs investors should be aware of before investing in Fusion Finance. Read for free now.

To get a sense of who is truly in control of Fusion Finance Limited (NSE:FUSIONPP), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 60% to be precise, is private equity firms. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Private equity firms gained the most after market cap touched ₹18b last week, while institutions who own 26% also benefitted.

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

View our latest analysis for Fusion Finance

What Does The Institutional Ownership Tell Us About Fusion Finance?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Fusion Finance 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. 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 Fusion Finance's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Fusion Finance. Our data shows that Warburg Pincus LLC is the largest shareholder with 33% of shares outstanding. For context, the second largest shareholder holds about 14% of the shares outstanding, followed by an ownership of 13% by the third-largest shareholder.

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.

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 Fusion 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.

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.

Our data suggests that insiders own under 1% of Fusion Finance Limited in their own names. It seems the board members have no more than ₹177m worth of shares in the ₹18b company. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

With a 13% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Fusion Finance. 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 Equity Ownership

Private equity firms hold a 60% stake in Fusion Finance. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for Fusion Finance 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.