Private companies among Avadh Sugar & Energy Limited's (NSE:AVADHSUGAR) largest stockholders and were hit after last week's 13% price drop

Key Insights

• The considerable ownership by private companies in Avadh Sugar & Energy indicates that they collectively have a greater say in management and business strategy
• The top 6 shareholders own 51% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Avadh Sugar & Energy Limited (NSE:AVADHSUGAR) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 35% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to ₹8.8b last week, private companies would have faced the highest losses than any other shareholder groups of the company.

Let's take a closer look to see what the different types of shareholders can tell us about Avadh Sugar & Energy.

Check out our latest analysis for Avadh Sugar & Energy

What Does The Institutional Ownership Tell Us About Avadh Sugar & Energy?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Since institutions own only a small portion of Avadh Sugar & Energy, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

Hedge funds don't have many shares in Avadh Sugar & Energy. The company's largest shareholder is SIL Investments Limited, with ownership of 20%. With 9.7% and 7.4% of the shares outstanding respectively, K.K. Birla Group of Companies and Ganges Securities Limited are the second and third largest shareholders.

We did some more digging and found that 6 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. 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 Avadh Sugar & Energy

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

We can report that insiders do own shares in Avadh Sugar & Energy Limited. In their own names, insiders own ₹678m worth of stock in the ₹8.8b company. Some would say this shows alignment of interests between shareholders and the board, though we generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 28% stake in Avadh Sugar & Energy. 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

It seems that Private Companies own 35%, of the Avadh Sugar & Energy stock. 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.

Public Company Ownership

Public companies currently own 27% of Avadh Sugar & Energy stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Avadh Sugar & Energy better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Avadh Sugar & Energy you should be aware of, and 1 of them is a bit concerning.

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.