Castrol India Limited's (NSE:CASTROLIND) largest shareholders are public companies who were rewarded as market cap surged ₹11b last week

Key Insights

• Significant control over Castrol India by public companies implies that the general public has more power to influence management and governance-related decisions
• 51% of the company is held by a single shareholder (BP p.l.c.)
• 19% of Castrol India is held by Institutions

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Every investor in Castrol India Limited (NSE:CASTROLIND) should be aware of the most powerful shareholder groups. We can see that public companies own the lion's share in the company with 51% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, public companies collectively scored the highest last week as the company hit ₹209b market cap following a 5.7% gain in the stock.

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

Check out our latest analysis for Castrol India

What Does The Institutional Ownership Tell Us About Castrol India?

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.

Castrol India 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. 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 Castrol India's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Castrol India. The company's largest shareholder is BP p.l.c., with ownership of 51%. This implies that they have majority interest control of the future of the company. With 10% and 1.9% of the shares outstanding respectively, Life Insurance Corporation of India, Asset Management Arm and The Vanguard Group, Inc. are the second and third largest shareholders.

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. 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 Castrol India

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.

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 less than 1% of Castrol India Limited. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around ₹3.9m worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 28% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Public Company Ownership

It appears to us that public companies own 51% of Castrol India. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Castrol India has 1 warning sign we think 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.