With 65% ownership, Narayana Hrudayalaya Limited (NSE:NH) insiders have a lot at stake

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
• 14% of Narayana Hrudayalaya is held by Institutions

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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. With 65% stake, individual insiders possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

So it follows, every decision made by insiders of Narayana Hrudayalaya regarding the company's future would be crucial to them.

In the chart below, we zoom in on the different ownership groups of Narayana Hrudayalaya.

View our latest analysis for Narayana Hrudayalaya

What Does The Institutional Ownership Tell Us About Narayana Hrudayalaya?

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.

We can see that Narayana Hrudayalaya does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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.

We note that hedge funds don't have a meaningful investment in Narayana Hrudayalaya. The company's largest shareholder is Shakuntala Shetty, with ownership of 36%. In comparison, the second and third largest shareholders hold about 12% and 5.0% of the stock. 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.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.

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

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.

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.

It seems that insiders own more than half the Narayana Hrudayalaya Limited stock. This gives them a lot of power. Insiders own ₹264b worth of shares in the ₹404b 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

The general public, who are usually individual investors, hold a 19% stake in Narayana Hrudayalaya. 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 Narayana Hrudayalaya better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Narayana Hrudayalaya you should be aware of.

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.