Despite selling recently, Infibeam Avenues Limited (NSE:INFIBEAM) insiders own 50% stake and recent decline might have cost them

Key Insights

• Infibeam Avenues' significant insider ownership suggests inherent interests in company's expansion
• The top 7 shareholders own 50% of the company
• Insiders have sold recently

A look at the shareholders of Infibeam Avenues Limited (NSE:INFIBEAM) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 50% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And our data suggests that insiders own the top position in the company’s share registry despite recent sales. As a result, they were also the group to endure the biggest losses as the stock fell by 5.2%.

In the chart below, we zoom in on the different ownership groups of Infibeam Avenues.

See our latest analysis for Infibeam Avenues

What Does The Institutional Ownership Tell Us About Infibeam Avenues?

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.

Since institutions own only a small portion of Infibeam Avenues, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. So if the company itself can improve over time, we may well see more institutional buyers in the future. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

Infibeam Avenues is not owned by hedge funds. With a 11% stake, CEO Vishal Mehta is the largest shareholder. With 11% and 8.7% of the shares outstanding respectively, Vishwas Patel and Ajit Mehta are the second and third largest shareholders. Note that two of the top three shareholders are also Co-Chief Executive Officer and Chairman Emeritus, respectively, once again pointing to significant ownership by company insiders.

We did some more digging and found that 7 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Infibeam Avenues

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

It seems insiders own a significant proportion of Infibeam Avenues Limited. Insiders own ₹39b worth of shares in the ₹78b company. 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-- including retail investors -- own 33% 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.

Private Company Ownership

We can see that Private Companies own 12%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Infibeam Avenues better, we need to consider many other factors. Be aware that Infibeam Avenues is showing 2 warning signs in our investment analysis , you should know about...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com