APL Apollo Tubes Limited's (NSE:APLAPOLLO) recent 5.9% pullback adds to one-year year losses, institutional owners may take drastic measures

Key Insights

• Given the large stake in the stock by institutions, APL Apollo Tubes' stock price might be vulnerable to their trading decisions
• 52% of the business is held by the top 7 shareholders
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls APL Apollo Tubes Limited (NSE:APLAPOLLO), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are institutions with 39% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And so it follows that institutional investors was the group most impacted after the company's market cap fell to ₹422b last week after a 5.9% drop in the share price. This set of investors may especially be concerned about the current loss, which adds to a one-year loss of 1.7% for shareholders. Often called “market movers", institutions wield significant power in influencing the price dynamics of any stock. As a result, if the downtrend continues, institutions may face pressures to sell APL Apollo Tubes, which might have negative implications on individual investors.

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

See our latest analysis for APL Apollo Tubes

What Does The Institutional Ownership Tell Us About APL Apollo Tubes?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in APL Apollo Tubes. 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. 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 APL Apollo Tubes' earnings history below. Of course, the future is what really matters.

APL Apollo Tubes is not owned by hedge funds. APL Infrastructure Pvt. Ltd. is currently the largest shareholder, with 27% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 9.2% and 6.6%, of the shares outstanding, respectively.

We did some more digging and found that 7 of the top shareholders account for roughly 52% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 APL Apollo Tubes

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

We can report that insiders do own shares in APL Apollo Tubes Limited. The insiders have a meaningful stake worth ₹14b. Most would see this as a real positive. Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 24% stake in APL Apollo Tubes. 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 6.6%, private equity firms could influence the APL Apollo Tubes board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

Our data indicates that Private Companies hold 27%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand APL Apollo Tubes better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with APL Apollo Tubes .

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.