state or government who own 63% along with institutions invested in Coal India Limited (NSE:COALINDIA) saw increase in their holdings value last week

Key Insights

• The considerable ownership by state or government in Coal India indicates that they collectively have a greater say in management and business strategy
• India owns 63% of the company
• 25% of Coal India is held by Institutions

To get a sense of who is truly in control of Coal India Limited (NSE:COALINDIA), it is important to understand the ownership structure of the business. We can see that state or government own the lion's share in the company with 63% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 4.2% increase in the stock price last week, state or government profited the most, but institutions who own 25% stock also stood to gain from the increase.

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

View 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.

Coal India 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 Coal India's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Coal India. Looking at our data, we can see that the largest shareholder is India with 63% 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 9.7% of common stock, and Nippon Life India Asset Management Limited holds about 2.8% of the company stock.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

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. 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 data suggests that insiders own under 1% of Coal India Limited in their own names. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own ₹644k of stock. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 12% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Coal India. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Coal India better, we need to consider many other factors. For example, we've discovered 1 warning sign for Coal India that you should be aware of before investing here.

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.