Bannari Amman Sugars Limited's (NSE:BANARISUG) market cap rose ₹4.9b last week; private companies who hold 53% profited and so did insiders

Key Insights

• Significant control over Bannari Amman Sugars by private companies implies that the general public has more power to influence management and governance-related decisions
• 52% of the business is held by the top 2 shareholders
• Insider ownership in Bannari Amman Sugars is 25%

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If you want to know who really controls Bannari Amman Sugars Limited (NSE:BANARISUG), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private companies with 53% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While private companies were the group that benefitted the most from last week’s ₹4.9b market cap gain, insiders too had a 25% share in those profits.

In the chart below, we zoom in on the different ownership groups of Bannari Amman Sugars.

See our latest analysis for Bannari Amman Sugars

What Does The Institutional Ownership Tell Us About Bannari Amman Sugars?

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 Bannari Amman Sugars, 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. So if the company itself can improve over time, we may well see more institutional buyers in the future. 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.

We note that hedge funds don't have a meaningful investment in Bannari Amman Sugars. Looking at our data, we can see that the largest shareholder is SVB Holdings Private Limited with 44% of shares outstanding. For context, the second largest shareholder holds about 8.4% of the shares outstanding, followed by an ownership of 5.5% by the third-largest shareholder. S. Balasubramaniam, who is the second-largest shareholder, also happens to hold the title of Top Key Executive. Additionally, the company's CEO B. Saravanan directly holds 1.4% of the total shares outstanding.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. 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 Bannari Amman Sugars

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 most recent data indicates that insiders own a reasonable proportion of Bannari Amman Sugars Limited. Insiders have a ₹13b stake in this ₹51b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

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.

Private Company Ownership

We can see that Private Companies own 53%, of the shares on issue. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Bannari Amman Sugars you should know about.

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.