Both state or government who control a good portion of Housing and Urban Development Corporation Limited (NSE:HUDCO) along with institutions must be dismayed after last week's 8.2% decrease

Key Insights

• Housing and Urban Development's significant state or government ownership suggests that the key decisions are influenced by shareholders from the larger public
• India owns 54% of the company
• 13% of Housing and Urban Development is held by Institutions

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To get a sense of who is truly in control of Housing and Urban Development Corporation Limited (NSE:HUDCO), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are state or government with 75% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of state or government took a hit after last week’s 8.2% price drop, institutions with their 13% holdings also suffered.

In the chart below, we zoom in on the different ownership groups of Housing and Urban Development.

Check out our latest analysis for Housing and Urban Development

What Does The Institutional Ownership Tell Us About Housing and Urban Development?

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.

As you can see, institutional investors have a fair amount of stake in Housing and Urban Development. 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. 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 Housing and Urban Development'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 Housing and Urban Development. The company's largest shareholder is India, with ownership of 54%. This implies that they have majority interest control of the future of the company. In comparison, the second and third largest shareholders hold about 21% and 7.1% of the stock.

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

Insider Ownership Of Housing and Urban Development

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

We note our data does not show any board members holding shares, personally. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.

General Public Ownership

The general public-- including retail investors -- own 12% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Housing and Urban Development better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Housing and Urban Development (including 1 which is significant) .

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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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.