Akzo Nobel India Limited's (NSE:AKZOINDIA) stock price dropped 4.3% last week; public companies would not be happy

Key Insights

• Akzo Nobel India's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 75% of the company is held by a single shareholder (Akzo Nobel N.V.)
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

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Every investor in Akzo Nobel India Limited (NSE:AKZOINDIA) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are public companies with 79% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As market cap fell to ₹141b last week, public companies would have faced the highest losses than any other shareholder groups of the company.

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

Check out our latest analysis for Akzo Nobel India

What Does The Institutional Ownership Tell Us About Akzo Nobel India?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Akzo Nobel 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. 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.

Hedge funds don't have many shares in Akzo Nobel India. Akzo Nobel N.V. is currently the largest shareholder, with 75% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. In comparison, the second and third largest shareholders hold about 4.4% and 2.0% of the stock.

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 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.

We note our data does not show any board members 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. 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 79% of Akzo Nobel 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:

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. Case in point: We've spotted 2 warning signs for Akzo Nobel India you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.