Insiders were the key beneficiaries as Hatsun Agro Product Limited's (NSE:HATSUN) market cap rises to ₹225b

Key Insights

• Hatsun Agro Product's significant insider ownership suggests inherent interests in company's expansion
• 55% of the company is held by a single shareholder (R. Chandramogan)
• Institutions own 12% of Hatsun Agro Product

To get a sense of who is truly in control of Hatsun Agro Product Limited (NSE:HATSUN), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 76% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by ₹13b last week.

Let's take a closer look to see what the different types of shareholders can tell us about Hatsun Agro Product.

View our latest analysis for Hatsun Agro Product

What Does The Institutional Ownership Tell Us About Hatsun Agro Product?

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.

As you can see, institutional investors have a fair amount of stake in Hatsun Agro Product. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Hatsun Agro Product's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Hatsun Agro Product. R. Chandramogan is currently the company's largest shareholder with 55% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 11% and 8.0% of the shares outstanding respectively, C. Sathyan and SBI Funds Management Limited are the second and third largest shareholders. C. Sathyan, who is the second-largest shareholder, also happens to hold the title of Senior Key Executive.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Hatsun Agro Product

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 information suggests that insiders own more than half of Hatsun Agro Product Limited. This gives them effective control of the company. Given it has a market cap of ₹225b, that means insiders have a whopping ₹171b worth of shares in their own names. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

With a 11% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Hatsun Agro Product. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Hatsun Agro Product better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Hatsun Agro Product , and understanding them should be part of your investment process.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.