Repco Home Finance Limited's (NSE:REPCOHOME) market cap dropped ₹2.7b last week; Private companies bore the brunt

Key Insights

• The considerable ownership by private companies in Repco Home Finance indicates that they collectively have a greater say in management and business strategy
• 51% of the business is held by the top 3 shareholders
• Institutions own 26% of Repco Home Finance

If you want to know who really controls Repco Home Finance Limited (NSE:REPCOHOME), then you'll have to look at the makeup of its share registry. We can see that private companies own the lion's share in the company with 39% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to ₹23b last week, private companies would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Repco Home Finance, beginning with the chart below.

View our latest analysis for Repco Home Finance

What Does The Institutional Ownership Tell Us About Repco Home Finance?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Repco Home Finance. 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. 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 Repco Home Finance's historic earnings and revenue below, but keep in mind there's always more to the story.

Repco Home Finance is not owned by hedge funds. The company's largest shareholder is Repatriates Cooperative Finance and Development Bank Limited, with ownership of 37%. For context, the second largest shareholder holds about 8.4% of the shares outstanding, followed by an ownership of 5.0% by the third-largest shareholder.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 51% 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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Repco Home 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.

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.

Shareholders would probably be interested to learn that insiders own shares in Repco Home Finance Limited. It has a market capitalization of just ₹23b, and insiders have ₹262m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 34% stake in Repco Home Finance. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 39%, 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:

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. Take risks for example - Repco Home Finance has 2 warning signs (and 1 which is significant) we think you should know about.

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.