HDFC Asset Management Company Limited's (NSE:HDFCAMC) largest shareholders are public companies with 52% ownership, institutions own 26%

Key Insights

• Significant control over HDFC Asset Management by public companies implies that the general public has more power to influence management and governance-related decisions
• 52% of the company is held by a single shareholder (HDFC Bank Limited)
• Institutional ownership in HDFC Asset Management is 26%

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Every investor in HDFC Asset Management Company Limited (NSE:HDFCAMC) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 52% to be precise, is public companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And institutions on the other hand have a 26% ownership in the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.

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

Check out our latest analysis for HDFC Asset Management

What Does The Institutional Ownership Tell Us About HDFC Asset Management?

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.

HDFC Asset Management already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 HDFC Asset Management's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in HDFC Asset Management. Our data shows that HDFC Bank Limited is the largest shareholder with 52% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Meanwhile, the second and third largest shareholders, hold 2.6% and 2.3%, of the shares outstanding, respectively.

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. 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 HDFC Asset Management

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 data suggests that insiders own under 1% of HDFC Asset Management Company Limited in their own names. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own ₹8.3b of stock. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 20% stake in the company, and hence can't easily be ignored. 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

We can see that public companies hold 52% of the HDFC Asset Management shares on issue. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with HDFC Asset Management , and understanding them should be part of your investment process.

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.

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.