TruCap Finance Limited's (NSE:TRU) market cap rose ₹1.4b last week; private companies who hold 51% profited and so did insiders

Key Insights

• The considerable ownership by private companies in TruCap Finance indicates that they collectively have a greater say in management and business strategy
• 59% of the business is held by the top 2 shareholders
• Insiders own 23% of TruCap Finance

A look at the shareholders of TruCap Finance Limited (NSE:TRU) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 51% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 18% increase in the stock price last week, private companies profited the most, but insiders who own 23% stock also stood to gain from the increase.

In the chart below, we zoom in on the different ownership groups of TruCap Finance.

See our latest analysis for TruCap Finance

What Does The Institutional Ownership Tell Us About TruCap 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.

TruCap Finance 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 TruCap Finance, (below). Of course, keep in mind that there are other factors to consider, too.

TruCap Finance is not owned by hedge funds. Truvalue Agro Ventures Private Limited is currently the company's largest shareholder with 49% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 10% and 5.1%, of the shares outstanding, respectively. In addition, we found that Rohanjeet Juneja, the CEO has 2.2% of the shares allocated to their name.

To make our study more interesting, we found that the top 2 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. 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 TruCap Finance

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

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 TruCap Finance Limited. Insiders own ₹2.0b worth of shares in the ₹9.0b company. 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

The general public-- including retail investors -- own 16% 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 51%, of the company's shares. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand TruCap Finance better, we need to consider many other factors. Be aware that TruCap Finance is showing 3 warning signs in our investment analysis , and 2 of those are a bit unpleasant...

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.