Both private companies who control a good portion of Atul Ltd (NSE:ATUL) along with institutions must be dismayed after last week's 7.4% decrease

Key Insights

• The considerable ownership by private companies in Atul indicates that they collectively have a greater say in management and business strategy
• A total of 7 investors have a majority stake in the company with 52% ownership
• 33% of Atul is held by Institutions

A look at the shareholders of Atul Ltd (NSE:ATUL) can tell us which group is most powerful. With 43% stake, private companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of private companies took a hit after last week’s 7.4% price drop, institutions with their 33% holdings also suffered.

In the chart below, we zoom in on the different ownership groups of Atul.

See our latest analysis for Atul

What Does The Institutional Ownership Tell Us About Atul?

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.

Atul 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Atul, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Atul. Aagam Holdings Pvt Ltd. is currently the largest shareholder, with 23% of shares outstanding. Arvind Farms Private Limited is the second largest shareholder owning 9.5% of common stock, and Life Insurance Corporation of India, Asset Management Arm holds about 5.4% of the company stock. In addition, we found that Sunil Lalbhai, the CEO has 0.5% of the shares allocated to their name.

We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Atul

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Atul Ltd. The insiders have a meaningful stake worth ₹9.8b. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 19% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 43%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Atul better, we need to consider many other factors. For instance, we've identified 1 warning sign for Atul that you should be aware of.

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. 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.