Coal India Limited's (NSE:COALINDIA) market cap dropped ₹224b last week; individual investors who hold 63% were hit as were institutions

Key Insights

• Significant control over Coal India by state or government implies that the general public has more power to influence management and governance-related decisions
• 63% of the company is held by a single shareholder (India)
• Institutional ownership in Coal India is 25%

If you want to know who really controls Coal India Limited (NSE:COALINDIA), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 63% to be precise, is state or government. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of state or government took a hit after last week’s 7.0% price drop, institutions with their 25% holdings also suffered.

In the chart below, we zoom in on the different ownership groups of Coal India.

Check out our latest analysis for Coal India

What Does The Institutional Ownership Tell Us About Coal India?

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.

As you can see, institutional investors have a fair amount of stake in Coal India. 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 Coal India's earnings history below. Of course, the future is what really matters.

Coal India is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is India with 63% of shares outstanding. This implies that they have majority interest control of the future of the company. With 10.0% and 2.9% of the shares outstanding respectively, Life Insurance Corporation of India, Asset Management Arm and Nippon Life India Asset Management Limited are the second and third largest shareholders.

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 Coal India

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our data suggests that insiders own under 1% of Coal India Limited in their own names. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own ₹824k worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

With a 12% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Coal India. 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. Be aware that Coal India is showing 1 warning sign in our investment analysis , you should know about...

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.

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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.