Manappuram Finance Limited's (NSE:MANAPPURAM) institutional investors lost 9.2% last week but have benefitted from longer-term gains

Key Insights

• Significantly high institutional ownership implies Manappuram Finance's stock price is sensitive to their trading actions
• 51% of the business is held by the top 8 shareholders
• Recent sales by insiders

If you want to know who really controls Manappuram Finance Limited (NSE:MANAPPURAM), then you'll have to look at the makeup of its share registry. With 41% stake, institutions possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Losing money on investments is something no shareholder enjoys, least of all institutional investors who saw their holdings value drop by 9.2% last week. Still, the 33% one-year gains may have helped mitigate their overall losses. They should, however, be mindful of further losses in the future.

In the chart below, we zoom in on the different ownership groups of Manappuram Finance.

See our latest analysis for Manappuram Finance

What Does The Institutional Ownership Tell Us About Manappuram Finance?

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.

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

Hedge funds don't have many shares in Manappuram Finance. Looking at our data, we can see that the largest shareholder is the CEO Vazhappully Nandakumar with 35% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 3.7% and 2.5%, of the shares outstanding, respectively.

We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Manappuram Finance

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

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.

Our most recent data indicates that insiders own a reasonable proportion of Manappuram Finance Limited. It is very interesting to see that insiders have a meaningful ₹55b stake in this ₹155b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 23% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Manappuram Finance. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Manappuram Finance better, we need to consider many other factors. For instance, we've identified 3 warning signs for Manappuram Finance (1 is concerning) that you should be aware of.

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.