SMC Global Securities Limited (NSE:SMCGLOBAL) adds ₹2.0b in market cap and insiders have a 41% stake in that gain

Key Insights

• Insiders appear to have a vested interest in SMC Global Securities' growth, as seen by their sizeable ownership
• A total of 4 investors have a majority stake in the company with 51% ownership
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

A look at the shareholders of SMC Global Securities Limited (NSE:SMCGLOBAL) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 41% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by ₹2.0b last week.

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

See our latest analysis for SMC Global Securities

What Does The Institutional Ownership Tell Us About SMC Global Securities?

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.

Less than 5% of SMC Global Securities is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

SMC Global Securities is not owned by hedge funds. The company's largest shareholder is Asm Pipes Private Limited, with ownership of 18%. With 15% and 9.1% of the shares outstanding respectively, Subhash Aggarwal and Pulin Investments (P) Ltd are the second and third largest shareholders. Subhash Aggarwal, who is the second-largest shareholder, also happens to hold the title of Top Key Executive. Additionally, the company's CEO Ajay Garg directly holds 0.8% of the total shares outstanding.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of SMC Global Securities

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

Our most recent data indicates that insiders own a reasonable proportion of SMC Global Securities Limited. It has a market capitalization of just ₹13b, and insiders have ₹5.4b worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 13% stake in the company, and hence can't easily be ignored. 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.

Private Company Ownership

Our data indicates that Private Companies hold 40%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand SMC Global Securities better, we need to consider many other factors. Be aware that SMC Global Securities is showing 3 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.