Institutions own 25% of Colgate-Palmolive (India) Limited (NSE:COLPAL) shares but public companies control 51% of the company

Key Insights

• Significant control over Colgate-Palmolive (India) by public companies implies that the general public has more power to influence management and governance-related decisions
• Colgate-Palmolive Company owns 51% of the company
• Institutional ownership in Colgate-Palmolive (India) is 25%

To get a sense of who is truly in control of Colgate-Palmolive (India) Limited (NSE:COLPAL), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are public companies with 51% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Meanwhile, institutions make up 25% of the company’s shareholders. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.

Let's delve deeper into each type of owner of Colgate-Palmolive (India), beginning with the chart below.

Check out our latest analysis for Colgate-Palmolive (India)

What Does The Institutional Ownership Tell Us About Colgate-Palmolive (India)?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Colgate-Palmolive (India) 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. 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 Colgate-Palmolive (India), (below). Of course, keep in mind that there are other factors to consider, too.

Colgate-Palmolive (India) is not owned by hedge funds. The company's largest shareholder is Colgate-Palmolive Company, with ownership of 51%. This implies that they have majority interest control of the future of the company. Mitsubishi UFJ Asset Management Co., Ltd. is the second largest shareholder owning 5.0% of common stock, and First Sentier Investors (Australia) IM Ltd holds about 2.6% of the company stock.

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 Colgate-Palmolive (India)

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 data suggests that insiders own under 1% of Colgate-Palmolive (India) Limited in their own names. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own ₹629k worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 23% stake in the company, and hence can't easily be ignored. 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.

Public Company Ownership

We can see that public companies hold 51% of the Colgate-Palmolive (India) shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Colgate-Palmolive (India) better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Colgate-Palmolive (India) , and understanding them should be part of your investment process.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com