Bajaj Hindusthan Sugar Limited's (NSE:BAJAJHIND) market cap dropped ₹4.9b last week; individual investors who hold 53% were hit as were institutions

Key Insights

• Significant control over Bajaj Hindusthan Sugar by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 25 shareholders own 47% of the company
• Institutional ownership in Bajaj Hindusthan Sugar is 19%

Every investor in Bajaj Hindusthan Sugar Limited (NSE:BAJAJHIND) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 53% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of retail investors took a hit after last week’s 11% price drop, institutions with their 19% holdings also suffered.

Let's delve deeper into each type of owner of Bajaj Hindusthan Sugar, beginning with the chart below.

View our latest analysis for Bajaj Hindusthan Sugar

What Does The Institutional Ownership Tell Us About Bajaj Hindusthan Sugar?

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.

Bajaj Hindusthan Sugar already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Bajaj Hindusthan Sugar's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Bajaj Hindusthan Sugar. The company's largest shareholder is Kushagra Bajaj, with ownership of 7.7%. Meanwhile, the second and third largest shareholders, hold 7.1% and 3.5%, of the shares outstanding, respectively.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Bajaj Hindusthan Sugar

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Bajaj Hindusthan Sugar Limited. As individuals, the insiders collectively own ₹3.5b worth of the ₹39b company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public -- including retail investors -- own 53% of Bajaj Hindusthan Sugar. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

It seems that Private Companies own 14%, of the Bajaj Hindusthan Sugar 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

It appears to us that public companies own 3.3% of Bajaj Hindusthan Sugar. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we've spotted with Bajaj Hindusthan Sugar .

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.