After the recent decline, G.M. Breweries Limited (NSE:GMBREW) CEO Jimmy Almeida's holdings have lost 10% of their value

By
Simply Wall St
Published
January 11, 2022
NSEI:GMBREW
Source: Shutterstock

If you want to know who really controls G.M. Breweries Limited (NSE:GMBREW), 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 individual insiders with 65% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, insiders endured the biggest losses as the stock fell by 10%.

Let's delve deeper into each type of owner of G.M. Breweries, beginning with the chart below.

View our latest analysis for G.M. Breweries

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NSEI:GMBREW Ownership Breakdown January 11th 2022

What Does The Institutional Ownership Tell Us About G.M. Breweries?

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.

Institutions have a very small stake in G.M. Breweries. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. 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.

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NSEI:GMBREW Earnings and Revenue Growth January 11th 2022

G.M. Breweries is not owned by hedge funds. With a 62% stake, CEO Jimmy Almeida is the largest shareholder. This implies that they possess majority interests and have significant control over the company. Investors usually consider it a good sign when the company leadership has such a significant stake, as this is widely perceived to increase the chance that the management will act in the best interests of the company. Meanwhile, the second and third largest shareholders, hold 11% and 2.0%, of the shares outstanding, respectively. Interestingly, the third-largest shareholder, Jyoti Almeida is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

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. 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 G.M. Breweries

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 most recent data indicates that insiders own the majority of G.M. Breweries Limited. This means they can collectively make decisions for the company. Given it has a market cap of ₹13b, that means they have ₹8.8b worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. 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 22% stake in G.M. Breweries. 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.

Private Company Ownership

Our data indicates that Private Companies hold 11%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

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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