Bharat Petroleum Corporation Limited (NSE:BPCL) surges 11%; state or government who own 55% shares profited along with institutions

Key Insights

• The considerable ownership by state or government in Bharat Petroleum indicates that they collectively have a greater say in management and business strategy
• 54% of the company is held by a single shareholder (India)
• Institutional ownership in Bharat Petroleum is 26%

To get a sense of who is truly in control of Bharat Petroleum Corporation Limited (NSE:BPCL), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 55% to be precise, is state or government. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While state or government were the group that reaped the most benefits after last week’s 11% price gain, institutions also received a 26% cut.

In the chart below, we zoom in on the different ownership groups of Bharat Petroleum.

View our latest analysis for Bharat Petroleum

What Does The Institutional Ownership Tell Us About Bharat Petroleum?

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.

Bharat Petroleum already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Bharat Petroleum's earnings history below. Of course, the future is what really matters.

Bharat Petroleum is not owned by hedge funds. Our data shows that India is the largest shareholder with 54% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Life Insurance Corporation of India, Asset Management Arm is the second largest shareholder owning 9.5% of common stock, and ICICI Prudential Asset Management Company Limited holds about 3.7% of the company stock.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Bharat Petroleum

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.

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 Bharat Petroleum Corporation Limited. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own ₹13m of stock. Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 18% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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 2 warning signs for Bharat Petroleum (of which 1 can't be ignored!) you should know about.

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.