Institutions along with private companies who hold considerable shares inSpandana Sphoorty Financial Limited (NSE:SPANDANA) come under pressure; lose 11% of holdings value

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
• 57% of the business is held by the top 3 shareholders
• 17% of Spandana Sphoorty Financial is held by Institutions

A look at the shareholders of Spandana Sphoorty Financial Limited (NSE:SPANDANA) can tell us which group is most powerful. The group holding the most number of shares in the company, around 45% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While the holdings of private companies took a hit after last week’s 11% price drop, institutions with their 17% holdings also suffered.

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

View our latest analysis for Spandana Sphoorty Financial

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

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.

As you can see, institutional investors have a fair amount of stake in Spandana Sphoorty Financial. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Spandana Sphoorty Financial's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Spandana Sphoorty Financial. Kangchenjunga Ltd. is currently the largest shareholder, with 41% of shares outstanding. The second and third largest shareholders are Valiant Mauritius Partners FDI Ltd and Padmaja Gangireddy, with an equal amount of shares to their name at 7.7%.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 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.

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 some shares in Spandana Sphoorty Financial Limited. It has a market capitalization of just ₹22b, and insiders have ₹1.7b 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

With a 16% 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 15%, 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

It seems that Private Companies own 45%, of the Spandana Sphoorty Financial stock. 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 Spandana Sphoorty Financial better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Spandana Sphoorty Financial you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.