What Kind Of Shareholders Hold The Majority In IFCI Limited's (NSE:IFCI) Shares?

A look at the shareholders of IFCI Limited (NSE:IFCI) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Companies that have been privatized tend to have low insider ownership.

IFCI is a smaller company with a market capitalization of ₹17b, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions own shares in the company. Let's take a closer look to see what the different types of shareholders can tell us about IFCI.

View our latest analysis for IFCI

What Does The Institutional Ownership Tell Us About IFCI?

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.

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.

Hedge funds don't have many shares in IFCI. India is currently the largest shareholder, with 61% of shares outstanding. This implies that they have majority interest control of the future of the company. Life Insurance Corporation of India, Asset Management Arm is the second largest shareholder owning 3.3% 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 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.

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 data suggests that insiders own under 1% of IFCI Limited in their own names. It appears that the board holds about ₹78k worth of stock. This compares to a market capitalization of ₹17b. I generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

With a 28% ownership, the general public have some degree of sway over IFCI. 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.

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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with IFCI (at least 1 which shouldn't be ignored) , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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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