Akzo Nobel India Limited's (NSE:AKZOINDIA) market cap surged ₹11b last week, public companies who have a lot riding on the company were rewarded

Key Insights

• Significant control over Akzo Nobel India by public companies implies that the general public has more power to influence management and governance-related decisions
• Akzo Nobel N.V. owns 75% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Every investor in Akzo Nobel India Limited (NSE:AKZOINDIA) should be aware of the most powerful shareholder groups. With 79% stake, public companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, public companies collectively scored the highest last week as the company hit ₹147b market cap following a 7.2% gain in the stock.

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

View our latest analysis for Akzo Nobel India

What Does The Institutional Ownership Tell Us About Akzo Nobel 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.

Akzo Nobel India 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Akzo Nobel India's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Akzo Nobel India. Akzo Nobel N.V. is currently the largest shareholder, with 75% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Asian Paints Limited is the second largest shareholder owning 4.4% of common stock, and Aditya Birla Sun Life AMC Limited holds about 2.0% 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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Akzo Nobel India

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our data cannot confirm that board members are holding shares personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

With a 11% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Akzo Nobel India. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

It appears to us that public companies own 79% of Akzo Nobel India. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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. Be aware that Akzo Nobel India 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.