What Kind Of Investors Own Most Of Advanced Enzyme Technologies Limited (NSE:ADVENZYMES)?

By
Simply Wall St
Published
January 19, 2021
NSEI:ADVENZYMES

Every investor in Advanced Enzyme Technologies Limited (NSE:ADVENZYMES) 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. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

With a market capitalization of ₹35b, Advanced Enzyme Technologies is a small cap stock, so it might not be well known by many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about Advanced Enzyme Technologies.

See our latest analysis for Advanced Enzyme Technologies

ownership-breakdown
NSEI:ADVENZYMES Ownership Breakdown January 20th 2021

What Does The Institutional Ownership Tell Us About Advanced Enzyme Technologies?

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 Advanced Enzyme Technologies 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 Advanced Enzyme Technologies' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NSEI:ADVENZYMES Earnings and Revenue Growth January 20th 2021

Advanced Enzyme Technologies is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Vasant Rathi with 38% of shares outstanding. OrbiMed Advisors LLC is the second largest shareholder owning 12% of common stock, and Advanced Vital Enzymes Private Limited holds about 12% of the company stock.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Advanced Enzyme Technologies

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. 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.

Our most recent data indicates that insiders own a reasonable proportion of Advanced Enzyme Technologies Limited. It has a market capitalization of just ₹35b, and insiders have ₹17b worth of shares in their own names. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public holds a 13% stake in Advanced Enzyme Technologies. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With a stake of 12%, private equity firms could influence the Advanced Enzyme Technologies board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

It seems that Private Companies own 13%, of the Advanced Enzyme Technologies stock. 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 Advanced Enzyme Technologies better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Advanced Enzyme Technologies .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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. 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.
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