Chambal Fertilisers and Chemicals Limited's (NSE:CHAMBLFERT) market cap surged ₹8.8b last week, private companies who have a lot riding on the company were rewarded

Key Insights

• The considerable ownership by private companies in Chambal Fertilisers and Chemicals indicates that they collectively have a greater say in management and business strategy
• A total of 8 investors have a majority stake in the company with 51% ownership
• 18% of Chambal Fertilisers and Chemicals is held by Institutions

If you want to know who really controls Chambal Fertilisers and Chemicals Limited (NSE:CHAMBLFERT), then you'll have to look at the makeup of its share registry. With 29% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, private companies benefitted the most after the company's market cap rose by ₹8.8b last week.

Let's take a closer look to see what the different types of shareholders can tell us about Chambal Fertilisers and Chemicals.

Check out our latest analysis for Chambal Fertilisers and Chemicals

What Does The Institutional Ownership Tell Us About Chambal Fertilisers and Chemicals?

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.

We can see that Chambal Fertilisers and Chemicals does have institutional investors; and they hold a good portion of the company's stock. 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 Chambal Fertilisers and Chemicals' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Chambal Fertilisers and Chemicals. Zuari Industries Limited is currently the largest shareholder, with 15% of shares outstanding. The Hindustan Times Limited is the second largest shareholder owning 14% of common stock, and SIL Investments Limited holds about 8.8% of the company stock.

We did some more digging and found that 8 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 Chambal Fertilisers and Chemicals

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Chambal Fertilisers and Chemicals Limited. The insiders have a meaningful stake worth ₹6.6b. Most would see this as a real positive. It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 24% 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

We can see that Private Companies own 29%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

It appears to us that public companies own 24% of Chambal Fertilisers and Chemicals. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 1 warning sign for Chambal Fertilisers and Chemicals that you should be aware of before investing here.

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.