Triveni Engineering & Industries Limited's (NSE:TRIVENI) market cap rose ₹4.9b last week; private companies who hold 36% profited and so did insiders

Key Insights

• The considerable ownership by private companies in Triveni Engineering & Industries indicates that they collectively have a greater say in management and business strategy
• 54% of the business is held by the top 3 shareholders
• Insider ownership in Triveni Engineering & Industries is 30%

Our free stock report includes 2 warning signs investors should be aware of before investing in Triveni Engineering & Industries. Read for free now.

Every investor in Triveni Engineering & Industries Limited (NSE:TRIVENI) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private companies with 36% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While private companies were the group that benefitted the most from last week’s ₹4.9b market cap gain, insiders too had a 30% share in those profits.

Let's take a closer look to see what the different types of shareholders can tell us about Triveni Engineering & Industries.

Check out our latest analysis for Triveni Engineering & Industries

What Does The Institutional Ownership Tell Us About Triveni Engineering & Industries?

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.

As you can see, institutional investors have a fair amount of stake in Triveni Engineering & Industries. 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. 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 Triveni Engineering & Industries, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Triveni Engineering & Industries. Our data shows that STFL Trading And Finance Private Limited is the largest shareholder with 36% of shares outstanding. In comparison, the second and third largest shareholders hold about 11% and 5.9% of the stock. Interestingly, the bottom two of the top three shareholders also hold the title of Co-Chief Executive Officer and Member of the Board of Directors, respectively, suggesting that these insiders have a personal stake in the company.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Triveni Engineering & Industries

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.

Our most recent data indicates that insiders own a reasonable proportion of Triveni Engineering & Industries Limited. It is very interesting to see that insiders have a meaningful ₹29b stake in this ₹95b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 22% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Triveni Engineering & Industries. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 36%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Triveni Engineering & Industries better, we need to consider many other factors. For instance, we've identified 2 warning signs for Triveni Engineering & Industries that you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.