The Andhra Sugars Limited's (NSE:ANDHRSUGAR) market cap dropped ₹1.3b last week; Individual investors bore the brunt

Key Insights

• The considerable ownership by individual investors in Andhra Sugars indicates that they collectively have a greater say in management and business strategy
• The top 25 shareholders own 48% of the company
• Insiders own 43% of Andhra Sugars

To get a sense of who is truly in control of The Andhra Sugars Limited (NSE:ANDHRSUGAR), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 52% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While insiders who own 43% came under pressure after market cap dropped to ₹11b last week,individual investors took the most losses.

Let's delve deeper into each type of owner of Andhra Sugars, beginning with the chart below.

Check out our latest analysis for Andhra Sugars

What Does The Institutional Ownership Tell Us About Andhra Sugars?

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.

Since institutions own only a small portion of Andhra Sugars, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Hedge funds don't have many shares in Andhra Sugars. Looking at our data, we can see that the largest shareholder is the CEO Pendyala Chowdary with 15% of shares outstanding. In comparison, the second and third largest shareholders hold about 7.8% and 6.6% of the stock. Note that two of the top three shareholders are also Co-Chief Executive Officer and Member of the Board of Directors, respectively, once again pointing to significant ownership by company insiders.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Andhra Sugars

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own a reasonable proportion of The Andhra Sugars Limited. It has a market capitalization of just ₹11b, and insiders have ₹4.7b worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 52% stake in Andhra Sugars, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Andhra Sugars better, we need to consider many other factors. For instance, we've identified 3 warning signs for Andhra Sugars (1 doesn't sit too well with us) that you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.