Stock Analysis

Private companies are Bigbloc Construction Limited's (NSE:BIGBLOC) biggest owners and were hit after market cap dropped ₹1.2b

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Key Insights

  • Significant control over Bigbloc Construction by private companies implies that the general public has more power to influence management and governance-related decisions
  • A total of 5 investors have a majority stake in the company with 54% ownership
  • Insiders own 35% of Bigbloc Construction

A look at the shareholders of Bigbloc Construction Limited (NSE:BIGBLOC) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 40% ownership. 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 13% price drop, insiders with their 35% also suffered.

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

See our latest analysis for Bigbloc Construction

NSEI:BIGBLOC Ownership Breakdown March 29th 2023

What Does The Institutional Ownership Tell Us About Bigbloc Construction?

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.

Bigbloc Construction already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Bigbloc Construction's earnings history below. Of course, the future is what really matters.

NSEI:BIGBLOC Earnings and Revenue Growth March 29th 2023

We note that hedge funds don't have a meaningful investment in Bigbloc Construction. The company's largest shareholder is Mohit Yarns Ltd., with ownership of 14%. Narayan Saboo is the second largest shareholder owning 12% of common stock, and Mohit Overseas Pvt. Ltd. holds about 11% of the company stock. Narayan Saboo, who is the second-largest shareholder, also happens to hold the title of Top Key Executive. Furthermore, CEO Naresh Saboo is the owner of 5.4% of the company's shares.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Bigbloc Construction

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Our most recent data indicates that insiders own a reasonable proportion of Bigbloc Construction Limited. It has a market capitalization of just ₹8.4b, and insiders have ₹2.9b 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 13% stake in Bigbloc Construction. 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

It seems that Private Companies own 40%, of the Bigbloc Construction stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Bigbloc Construction , and understanding them should be part of your investment process.

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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