Retail investors are Aarti Industries Limited's (NSE:AARTIIND) biggest owners and were hit after market cap dropped ₹9.2b

Key Insights

• Aarti Industries' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 23 investors have a majority stake in the company with 51% ownership
• Insiders own 28% of Aarti Industries

A look at the shareholders of Aarti Industries Limited (NSE:AARTIIND) can tell us which group is most powerful. The group holding the most number of shares in the company, around 32% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 3.6% decrease in the stock price last week, retail investors suffered the most losses, but insiders who own 28% stock also took a hit.

Let's take a closer look to see what the different types of shareholders can tell us about Aarti Industries.

View our latest analysis for Aarti Industries

What Does The Institutional Ownership Tell Us About Aarti Industries?

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.

Aarti Industries already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Aarti Industries' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Aarti Industries. Life Insurance Corporation of India, Asset Management Arm is currently the company's largest shareholder with 6.8% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.1% and 3.1%, of the shares outstanding, respectively.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 23 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Aarti Industries

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

It seems insiders own a significant proportion of Aarti Industries Limited. Insiders own ₹70b worth of shares in the ₹249b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 32% 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.

Private Company Ownership

We can see that Private Companies own 16%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Aarti Industries is showing 1 warning sign in our investment analysis , 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.

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