Motilal Oswal Financial Services Limited (NSE:MOTILALOFS) insiders have significant skin in the game with 75% ownership

Key Insights

• Insiders appear to have a vested interest in Motilal Oswal Financial Services' growth, as seen by their sizeable ownership
• A total of 2 investors have a majority stake in the company with 67% ownership
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

Every investor in Motilal Oswal Financial Services Limited (NSE:MOTILALOFS) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 75% 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.

So it follows, every decision made by insiders of Motilal Oswal Financial Services regarding the company's future would be crucial to them.

Let's delve deeper into each type of owner of Motilal Oswal Financial Services, beginning with the chart below.

View our latest analysis for Motilal Oswal Financial Services

What Does The Institutional Ownership Tell Us About Motilal Oswal Financial Services?

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.

We can see that Motilal Oswal Financial Services does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Motilal Oswal Financial Services' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Motilal Oswal Financial Services. Our data suggests that Raamdeo Agrawal, who is also the company's Top Key Executive, holds the most number of shares at 34%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. In comparison, the second and third largest shareholders hold about 33% and 5.1% of the stock. Interestingly, the second-largest shareholder, Motilal Oswal is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 67% stake.

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

Insider Ownership Of Motilal Oswal Financial Services

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own the majority of Motilal Oswal Financial Services Limited. This means they can collectively make decisions for the company. Given it has a market cap of ₹592b, that means insiders have a whopping ₹446b worth of shares in their own names. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

The general public, who are usually individual investors, hold a 16% stake in Motilal Oswal Financial Services. 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.

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. For instance, we've identified 3 warning signs for Motilal Oswal Financial Services (1 can't be ignored) that you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.