Painful week for individual investors invested in Dhampur Sugar Mills Limited (NSE:DHAMPURSUG) after 10% drop, institutions also suffered losses

Key Insights

• Significant control over Dhampur Sugar Mills by individual investors implies that the general public has more power to influence management and governance-related decisions
• 53% of the business is held by the top 5 shareholders
• Insider ownership in Dhampur Sugar Mills is 20%

Every investor in Dhampur Sugar Mills Limited (NSE:DHAMPURSUG) should be aware of the most powerful shareholder groups. With 39% stake, individual investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of individual investors took a hit after last week’s 10% price drop, institutions with their 31% holdings also suffered.

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

See our latest analysis for Dhampur Sugar Mills

What Does The Institutional Ownership Tell Us About Dhampur Sugar Mills?

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.

We can see that Dhampur Sugar Mills does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Dhampur Sugar Mills, (below). Of course, keep in mind that there are other factors to consider, too.

Dhampur Sugar Mills is not owned by hedge funds. The company's largest shareholder is Goel Investments Ltd., Asset Management Arm, with ownership of 28%. Meanwhile, the second and third largest shareholders, hold 8.9% and 7.6%, of the shares outstanding, respectively. Gaurav Goel, who is the third-largest shareholder, also happens to hold the title of Vice Chairman.

Our research also brought to light the fact that roughly 53% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Dhampur Sugar Mills

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. 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.

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.

Our information suggests that insiders maintain a significant holding in Dhampur Sugar Mills Limited. It has a market capitalization of just ₹9.6b, and insiders have ₹2.0b worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 39% stake in Dhampur Sugar Mills. 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 9.1%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Dhampur Sugar Mills better, we need to consider many other factors. For example, we've discovered 3 warning signs for Dhampur Sugar Mills (1 can't be ignored!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.