Manappuram Finance Limited's (NSE:MANAPPURAM) most bullish insider is CEO Vazhappully Nandakumar, and their holdings value went up by 6.4% last week

Key Insights

• Significant insider control over Manappuram Finance implies vested interests in company growth
• The top 8 shareholders own 50% of the company
• Institutional ownership in Manappuram Finance is 34%

To get a sense of who is truly in control of Manappuram Finance Limited (NSE:MANAPPURAM), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 36% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders were the biggest beneficiaries of last week’s 6.4% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Manappuram Finance.

See our latest analysis for Manappuram Finance

What Does The Institutional Ownership Tell Us About Manappuram Finance?

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.

Manappuram Finance already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Manappuram Finance, (below). Of course, keep in mind that there are other factors to consider, too.

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. Capital Research and Management Company is the second largest shareholder owning 5.0% of common stock, and BNP Paribas Arbitrage Sa, Asset Management Arm holds about 2.2% of the company stock.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Manappuram Finance

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 information suggests that insiders maintain a significant holding in Manappuram Finance Limited. It has a market capitalization of just ₹176b, and insiders have ₹63b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 30% stake in the company, and hence can't easily be ignored. 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:

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 example, we've discovered 2 warning signs for Manappuram Finance (1 shouldn't be ignored!) that you should be aware of before investing here.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.