Som Distilleries & Breweries Limited (NSE:SDBL) insiders have recently purchased stock and their bets paid off last week as company hit ₹23b market cap

Key Insights

• Significant insider control over Som Distilleries & Breweries implies vested interests in company growth
• The top 11 shareholders own 50% of the company
• Recent purchases by insiders

Every investor in Som Distilleries & Breweries Limited (NSE:SDBL) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 48% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Insiders who purchased recently should be particularly happy after the stock gained 11% in the past week.

Let's take a closer look to see what the different types of shareholders can tell us about Som Distilleries & Breweries.

See our latest analysis for Som Distilleries & Breweries

What Does The Institutional Ownership Tell Us About Som Distilleries & 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.

Less than 5% of Som Distilleries & Breweries is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Som Distilleries & Breweries is not owned by hedge funds. With a 21% stake, CEO Jagdish Arora is the largest shareholder. With 9.3% and 4.5% of the shares outstanding respectively, Som Distilleries Pvt, Ltd. and Ajay Arora are the second and third largest shareholders.

After doing some more digging, we found that the top 11 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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. 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 Som Distilleries & Breweries

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

It seems insiders own a significant proportion of Som Distilleries & Breweries Limited. Insiders own ₹11b worth of shares in the ₹23b company. 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

With a 41% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Som Distilleries & 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

We can see that Private Companies own 10%, 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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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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.