Bombay Super Hybrid Seeds Limited (NSE:BSHSL) CEO Arvindkumar Kakadia, the company's largest shareholder sees 16% reduction in holdings value

Key Insights

• Bombay Super Hybrid Seeds' significant insider ownership suggests inherent interests in company's expansion
• The top 2 shareholders own 59% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Bombay Super Hybrid Seeds Limited (NSE:BSHSL) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 74% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As market cap fell to ₹17b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Bombay Super Hybrid Seeds.

View our latest analysis for Bombay Super Hybrid Seeds

What Does The Lack Of Institutional Ownership Tell Us About Bombay Super Hybrid Seeds?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. Alternatively, there might be something about the company that has kept institutional investors away. Bombay Super Hybrid Seeds might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Hedge funds don't have many shares in Bombay Super Hybrid Seeds. The company's CEO Arvindkumar Kakadia is the largest shareholder with 32% of shares outstanding. For context, the second largest shareholder holds about 27% of the shares outstanding, followed by an ownership of 8.4% by the third-largest shareholder. Interestingly, the second and third-largest shareholders also happen to be the Chief Financial Officer and Member of the Board of Directors, respectively. This once again signifies considerable insider ownership amongst the company's top shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 59% stake.

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. 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 Bombay Super Hybrid Seeds

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems that insiders own more than half the Bombay Super Hybrid Seeds Limited stock. This gives them a lot of power. Given it has a market cap of ₹17b, that means they have ₹13b worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Bombay Super Hybrid Seeds. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 1 warning sign for Bombay Super Hybrid Seeds that you should be aware of.

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.