Do Directors Own SBI Life Insurance Company Limited (NSE:SBILIFE) Shares?

If you want to know who really controls SBI Life Insurance Company Limited (NSE:SBILIFE), then you’ll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies. We also tend to see lower insider ownership in companies that were previously publicly owned.

SBI Life Insurance has a market capitalization of ₹824b, so it’s too big to fly under the radar. We’d expect to see both institutions and retail investors owning a portion of the company. Taking a look at our data on the ownership groups (below), it’s seems that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about SBILIFE.

Check out our latest analysis for SBI Life Insurance

NSEI:SBILIFE Ownership Summary, October 9th 2019
NSEI:SBILIFE Ownership Summary, October 9th 2019

What Does The Institutional Ownership Tell Us About SBI Life Insurance?

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 SBI Life Insurance does have institutional investors; and they hold 14% of the 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. 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 SBI Life Insurance, (below). Of course, keep in mind that there are other factors to consider, too.

NSEI:SBILIFE Income Statement, October 9th 2019
NSEI:SBILIFE Income Statement, October 9th 2019

We note that hedge funds don’t have a meaningful investment in SBI Life Insurance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of SBI Life Insurance

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 most recent data indicates that insiders own less than 1% of SBI Life Insurance Company Limited. But they may have an indirect interest through a corporate structure that we haven’t picked up on. 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 ₹660k 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 holds a 21% stake in SBILIFE. 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

Public companies currently own 63% of SBILIFE 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:

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.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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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