Spandana Sphoorty Financial Limited's (NSE:SSFLPP) largest shareholders are retail investors who were rewarded as market cap surged ₹1.4b last week

Key Insights

• Significant control over Spandana Sphoorty Financial by retail investors implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 5 shareholders
• 13% of Spandana Sphoorty Financial is held by Institutions

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To get a sense of who is truly in control of Spandana Sphoorty Financial Limited (NSE:SSFLPP), it is important to understand the ownership structure of the business. With 39% stake, retail investors 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).

Clearly, retail investors benefitted the most after the company's market cap rose by ₹1.4b last week.

Let's take a closer look to see what the different types of shareholders can tell us about Spandana Sphoorty Financial.

View our latest analysis for Spandana Sphoorty Financial

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

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.

Spandana Sphoorty Financial already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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.

Spandana Sphoorty Financial is not owned by hedge funds. The company's largest shareholder is Kangchenjunga Ltd., with ownership of 33%. The second and third largest shareholders are Valiant Mauritius Partners FDI Ltd and Kedaara Capital Investment Managers Limited, with an equal amount of shares to their name at 5.7%.

On looking further, we found that 50% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 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.

Our most recent data indicates that insiders own less than 1% of Spandana Sphoorty Financial Limited. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It seems the board members have no more than ₹1.1m worth of shares in the ₹24b company. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 39% stake in Spandana Sphoorty Financial. 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 Equity Ownership

With a stake of 11%, 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

We can see that Private Companies own 36%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Spandana Sphoorty Financial (of which 2 can't be ignored!) you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.