Stock Analysis

What Kind Of Shareholders Hold The Majority In Eveready Industries India Limited's (NSE:EVEREADY) Shares?

NSEI:EVEREADY
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Every investor in Eveready Industries India Limited (NSE:EVEREADY) should be aware of the most powerful shareholder groups. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

With a market capitalization of ₹14b, Eveready Industries India is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. Let's take a closer look to see what the different types of shareholders can tell us about Eveready Industries India.

View our latest analysis for Eveready Industries India

ownership-breakdown
NSEI:EVEREADY Ownership Breakdown January 21st 2021

What Does The Institutional Ownership Tell Us About Eveready Industries India?

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.

We can see that Eveready Industries India does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Eveready Industries India's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NSEI:EVEREADY Earnings and Revenue Growth January 21st 2021

Eveready Industries India is not owned by hedge funds. M.B. Finmart Pvt Ltd, Asset Management Arm is currently the company's largest shareholder with 6.2% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.7% and 5.2% of the stock.

A closer look at our ownership figures suggests that the top 15 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Eveready Industries 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.

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.

I can report that insiders do own shares in Eveready Industries India Limited. It has a market capitalization of just ₹14b, and insiders have ₹772m worth of shares, in their own names. It is good to see some investment by insiders, but I usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

With a 26% ownership, the general public have some degree of sway over Eveready Industries India. 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

We can see that Private Companies own 21%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Eveready Industries India better, we need to consider many other factors. For example, we've discovered 3 warning signs for Eveready Industries India that you should be aware of before investing here.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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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