Gillette India Limited's (NSE:GILLETTE) market cap dropped ₹15b last week; individual investors who hold 75% were hit as were institutions

Key Insights

• Significant control over Gillette India by public companies implies that the general public has more power to influence management and governance-related decisions
• 75% of the company is held by a single shareholder (The Procter & Gamble Company)
• Institutional ownership in Gillette India is 11%

Every investor in Gillette India Limited (NSE:GILLETTE) should be aware of the most powerful shareholder groups. With 75% stake, public companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of public companies took a hit after last week’s 5.2% price drop, institutions with their 11% holdings also suffered.

Let's delve deeper into each type of owner of Gillette India, beginning with the chart below.

See our latest analysis for Gillette India

What Does The Institutional Ownership Tell Us About Gillette 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.

We can see that Gillette India does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Gillette India's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Gillette India. The company's largest shareholder is The Procter & Gamble Company, with ownership of 75%. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Life Insurance Corporation of India, Asset Management Arm is the second largest shareholder owning 5.3% of common stock, and Aditya Birla Sun Life AMC Limited holds about 2.3% of the company stock.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Gillette India

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.

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.

Our information suggests that Gillette India Limited insiders own under 1% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own ₹855k worth of shares. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

With a 11% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Gillette India. 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.

Public Company Ownership

Public companies currently own 75% of Gillette India stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Gillette India has 1 warning sign we think you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.