Owning 65% in Narayana Hrudayalaya Limited (NSE:NH) means that insiders are heavily invested in the company's future

Key Insights

• Insiders appear to have a vested interest in Narayana Hrudayalaya's growth, as seen by their sizeable ownership
• 52% of the business is held by the top 3 shareholders
• 14% of Narayana Hrudayalaya is held by Institutions

If you want to know who really controls Narayana Hrudayalaya Limited (NSE:NH), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 65% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.

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

Check out our latest analysis for Narayana Hrudayalaya

What Does The Institutional Ownership Tell Us About Narayana Hrudayalaya?

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 Narayana Hrudayalaya. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Narayana Hrudayalaya's historic earnings and revenue below, but keep in mind there's always more to the story.

Narayana Hrudayalaya is not owned by hedge funds. Shakuntala Shetty is currently the largest shareholder, with 36% of shares outstanding. For context, the second largest shareholder holds about 12% of the shares outstanding, followed by an ownership of 5.0% by the third-largest shareholder. Two of the top three shareholders happen to be Top Key Executive and Vice Chairman, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders.

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 Narayana Hrudayalaya

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders own more than half of Narayana Hrudayalaya Limited. This gives them effective control of the company. Insiders own ₹173b worth of shares in the ₹265b company. That's extraordinary! 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 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Narayana Hrudayalaya. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Narayana Hrudayalaya better, we need to consider many other factors. For example, we've discovered 2 warning signs for Narayana Hrudayalaya (1 is significant!) that you should be aware of before investing here.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.