SBFC Finance Limited's (NSE:SBFC) market cap touched ₹95b last week, benefiting both private companies who own 55% as well as institutions

Key Insights

• Significant control over SBFC Finance by private companies implies that the general public has more power to influence management and governance-related decisions
• 55% of the company is held by a single shareholder (SBFC Holdings Pte. Ltd.)
• 25% of SBFC Finance is held by Institutions

A look at the shareholders of SBFC Finance Limited (NSE:SBFC) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 55% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Private companies gained the most after market cap touched ₹95b last week, while institutions who own 25% also benefitted.

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

See our latest analysis for SBFC Finance

What Does The Institutional Ownership Tell Us About SBFC 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 SBFC Finance. 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. 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 SBFC Finance, (below). Of course, keep in mind that there are other factors to consider, too.

SBFC Finance is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is SBFC Holdings Pte. Ltd. with 55% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. SBI Funds Management Limited is the second largest shareholder owning 9.0% of common stock, and Amansa Capital Pte. Ltd. holds about 3.8% of the company stock. Additionally, the company's CEO Aseem Dhru directly holds 3.2% of the total shares outstanding.

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 SBFC Finance

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

We can report that insiders do own shares in SBFC Finance Limited. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around ₹4.9b worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 14% 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.

Private Company Ownership

It seems that Private Companies own 55%, of the SBFC Finance stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 1 warning sign for SBFC Finance 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.