Private companies invested in Chambal Fertilisers and Chemicals Limited (NSE:CHAMBLFERT) copped the brunt of last week's ₹9.4b market cap decline

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
• 51% of the business is held by the top 8 shareholders
• Institutions own 17% of Chambal Fertilisers and Chemicals

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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. 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).

As a result, private companies as a group endured the highest losses last week after market cap fell by ₹9.4b.

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.

Chambal Fertilisers and Chemicals 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. 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 Chambal Fertilisers and Chemicals, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Chambal Fertilisers and Chemicals. The company's largest shareholder is Zuari Industries Limited, with ownership of 15%. With 14% and 8.9% of the shares outstanding respectively, The Hindustan Times Limited and SIL Investments Limited are the second and third largest shareholders.

We also observed that the top 8 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.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Chambal Fertilisers and Chemicals

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. 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.

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.

We can report that insiders do own shares in Chambal Fertilisers and Chemicals Limited. This is a big company, so it is good to see this level of alignment. Insiders own ₹6.0b worth of shares (at current prices). 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

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Chambal Fertilisers and Chemicals. 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 29%, of the Chambal Fertilisers and Chemicals stock. 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.

Public Company Ownership

It appears to us that public companies own 24% of Chambal Fertilisers and Chemicals. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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. Be aware that Chambal Fertilisers and Chemicals is showing 2 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

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.