How Many IFCI Limited (NSE:IFCI) Shares Do Institutions Own?

Every investor in IFCI Limited (NSE:IFCI) should be aware of the most powerful shareholder groups. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.

IFCI is not a large company by global standards. It has a market capitalization of ₹26b, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutions are noticeable on the share registry. Let's delve deeper into each type of owner, to discover more about IFCI.

Check out our latest analysis for IFCI

What Does The Institutional Ownership Tell Us About IFCI?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

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

We note that hedge funds don't have a meaningful investment in IFCI. India is currently the largest shareholder, with 64% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Life Insurance Corporation of India, Asset Management Arm is the second largest shareholder owning 2.9% of common stock, and The Vanguard Group, Inc. holds about 1.1% of the company 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. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of IFCI

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own less than 1% of IFCI Limited. It appears that the board holds about ₹111k worth of stock. This compares to a market capitalization of ₹26b. I generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, with a 26% stake in the company, will not 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Be aware that IFCI is showing 4 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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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