Private companies account for 29% of Chambal Fertilisers and Chemicals Limited's (NSE:CHAMBLFERT) ownership, while public companies account for 24%

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
• The top 8 shareholders own 51% of the company
• 18% of Chambal Fertilisers and Chemicals is held by Institutions

A look at the shareholders of Chambal Fertilisers and Chemicals Limited (NSE:CHAMBLFERT) can tell us which group is most powerful. The group holding the most number of shares in the company, around 29% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

Meanwhile, public companies make up 24% of the company’s shareholders.

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

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.

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. 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 Chambal Fertilisers and Chemicals' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Chambal Fertilisers and Chemicals. Our data shows that Zuari Industries Limited is the largest shareholder with 15% of shares outstanding. For context, the second largest shareholder holds about 14% of the shares outstanding, followed by an ownership of 8.8% by the third-largest shareholder.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

Shareholders would probably be interested to learn that insiders own shares in Chambal Fertilisers and Chemicals Limited. The insiders have a meaningful stake worth ₹5.7b. 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, who are usually individual investors, hold a 24% stake in Chambal Fertilisers and Chemicals. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

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. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Chambal Fertilisers and Chemicals better, we need to consider many other factors. Take risks for example - Chambal Fertilisers and Chemicals 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.