The recent pullback must have dismayed Narayana Hrudayalaya Limited (NSE:NH) insiders who own 65% of the company

Key Insights

• Narayana Hrudayalaya's significant insider ownership suggests inherent interests in company's expansion
• 52% of the business is held by the top 3 shareholders
• Institutional ownership in Narayana Hrudayalaya is 14%

To get a sense of who is truly in control of Narayana Hrudayalaya Limited (NSE:NH), 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 65% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 3.8% decline in share price, insiders suffered the most losses.

In the chart below, we zoom in on the different ownership groups of 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. 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 Narayana Hrudayalaya, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Narayana Hrudayalaya. Shakuntala Shetty is currently the company's largest shareholder with 31% of shares outstanding. With 17% and 5.0% of the shares outstanding respectively, Devi Shetty and Viren Shetty are the second and third largest shareholders. 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.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Narayana Hrudayalaya

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 the majority of Narayana Hrudayalaya Limited. This means they can collectively make decisions for the company. Given it has a market cap of ₹244b, that means insiders have a whopping ₹159b worth of shares in their own names. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

With a 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Narayana Hrudayalaya. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 1 warning sign for Narayana Hrudayalaya that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.