Bajaj Consumer Care Limited's (NSE:BAJAJCON) market cap surged ₹4.0b last week, private companies who have a lot riding on the company were rewarded

Key Insights

• Significant control over Bajaj Consumer Care by private companies implies that the general public has more power to influence management and governance-related decisions
• 55% of the business is held by the top 3 shareholders
• Institutional ownership in Bajaj Consumer Care is 27%

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Every investor in Bajaj Consumer Care Limited (NSE:BAJAJCON) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 42% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, private companies collectively scored the highest last week as the company hit ₹35b market cap following a 13% gain in the stock.

Let's delve deeper into each type of owner of Bajaj Consumer Care, beginning with the chart below.

Check out our latest analysis for Bajaj Consumer Care

What Does The Institutional Ownership Tell Us About Bajaj Consumer Care?

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.

Bajaj Consumer Care already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Bajaj Consumer Care's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Bajaj Consumer Care. Our data shows that Bajaj Resources Limited is the largest shareholder with 41% of shares outstanding. The second and third largest shareholders are Nippon Life India Asset Management Limited and HDFC Asset Management Company Limited, with an equal amount of shares to their name at 7.2%.

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

Insider Ownership Of Bajaj Consumer Care

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

We can see that insiders own shares in Bajaj Consumer Care Limited. It has a market capitalization of just ₹35b, and insiders have ₹454m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 30% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Bajaj Consumer Care. 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

It seems that Private Companies own 42%, of the Bajaj Consumer Care stock. 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:

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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Bajaj Consumer Care you should know about.

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.