L&T Finance Holdings Limited (NSE:L&TFH) stock most popular amongst public companies who own 66%, while individual investors hold 18%

Key Insights

• L&T Finance Holdings' significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 66% of the company is held by a single shareholder (Larsen & Toubro Limited)
• 16% of L&T Finance Holdings is held by Institutions

A look at the shareholders of L&T Finance Holdings Limited (NSE:L&TFH) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are public companies with 66% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Meanwhile, individual investors make up 18% of the company’s shareholders.

In the chart below, we zoom in on the different ownership groups of L&T Finance Holdings.

View our latest analysis for L&T Finance Holdings

What Does The Institutional Ownership Tell Us About L&T Finance Holdings?

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.

We can see that L&T Finance Holdings does have institutional investors; and they hold a good portion of the company's stock. 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 L&T Finance Holdings' earnings history below. Of course, the future is what really matters.

L&T Finance Holdings is not owned by hedge funds. The company's largest shareholder is Larsen & Toubro Limited, with ownership of 66%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. BNP Paribas Arbitrage Sa, Asset Management Arm is the second largest shareholder owning 2.4% of common stock, and Life Insurance Corporation of India, Asset Management Arm holds about 1.9% 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of L&T Finance Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 L&T Finance Holdings Limited. Keep in mind that it's a big company, and the insiders own ₹101m worth of shares. The absolute value might be more important than the proportional share. 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 18% 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 66% of the L&T Finance Holdings 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:

It's always worth thinking about the different groups who own shares in a company. But to understand L&T Finance Holdings better, we need to consider many other factors. Take risks for example - L&T Finance Holdings has 3 warning signs (and 1 which is concerning) we think 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.