Geojit Financial Services Limited's (NSE:GEOJITFSL) top holders are insiders and they are likely disappointed by the recent 12% drop

By
Simply Wall St
Published
February 23, 2022
NSEI:GEOJITFSL
Source: Shutterstock

If you want to know who really controls Geojit Financial Services Limited (NSE:GEOJITFSL), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 37% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, insiders endured the biggest losses as the stock fell by 12%.

In the chart below, we zoom in on the different ownership groups of Geojit Financial Services.

View our latest analysis for Geojit Financial Services

ownership-breakdown
NSEI:GEOJITFSL Ownership Breakdown February 23rd 2022

What Does The Lack Of Institutional Ownership Tell Us About Geojit Financial Services?

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

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Geojit Financial Services, for yourself, below.

earnings-and-revenue-growth
NSEI:GEOJITFSL Earnings and Revenue Growth February 23rd 2022

We note that hedge funds don't have a meaningful investment in Geojit Financial Services. BNP Paribas SA is currently the largest shareholder, with 32% of shares outstanding. For context, the second largest shareholder holds about 21% of the shares outstanding, followed by an ownership of 8.4% by the third-largest shareholder. Chenayappillil George, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 53% stake.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Geojit Financial Services

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 most recent data indicates that insiders own a reasonable proportion of Geojit Financial Services Limited. Insiders have a ₹6.0b stake in this ₹16b 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 21% stake in Geojit Financial Services. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

It appears to us that public companies own 32% of Geojit Financial Services. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for Geojit Financial Services that you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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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