Both private companies who control a good portion of Spandana Sphoorty Financial Limited (NSE:SPANDANA) along with institutions must be dismayed after last week's 8.0% decrease

Key Insights

• The considerable ownership by private companies in Spandana Sphoorty Financial indicates that they collectively have a greater say in management and business strategy
• A total of 2 investors have a majority stake in the company with 53% ownership
• Insiders own 12% of Spandana Sphoorty Financial

To get a sense of who is truly in control of Spandana Sphoorty Financial Limited (NSE:SPANDANA), it is important to understand the ownership structure of the business. With 43% stake, private companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While institutions, who own 18% shares weren’t spared from last week’s ₹5.2b market cap drop, private companies as a group suffered the maximum losses

Let's delve deeper into each type of owner of Spandana Sphoorty Financial, beginning with the chart below.

See our latest analysis for Spandana Sphoorty Financial

What Does The Institutional Ownership Tell Us About Spandana Sphoorty Financial?

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.

Spandana Sphoorty Financial already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Spandana Sphoorty Financial, (below). Of course, keep in mind that there are other factors to consider, too.

Spandana Sphoorty Financial is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Kangchenjunga Ltd. with 41% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 12% and 7.1%, of the shares outstanding, respectively.

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 53% stake.

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. 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 Spandana Sphoorty Financial

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.

Our information suggests that insiders maintain a significant holding in Spandana Sphoorty Financial Limited. It has a market capitalization of just ₹60b, and insiders have ₹7.0b worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 14% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Spandana Sphoorty Financial. 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.

Private Equity Ownership

With a stake of 14%, private equity firms could influence the Spandana Sphoorty Financial board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

Our data indicates that Private Companies hold 43%, 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:

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 1 warning sign for Spandana Sphoorty Financial 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.