Kamalkumar Aggarwal Chemcon Speciality Chemicals Limited's (NSE:CHEMCON) CEO is the most bullish insider, and their stock value gained 12%last week

Key Insights

• Significant insider control over Chemcon Speciality Chemicals implies vested interests in company growth
• The top 2 shareholders own 59% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of Chemcon Speciality Chemicals Limited (NSE:CHEMCON), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 74% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, insiders benefitted the most after the company's market cap rose by ₹1.2b last week.

Let's delve deeper into each type of owner of Chemcon Speciality Chemicals, beginning with the chart below.

View our latest analysis for Chemcon Speciality Chemicals

What Does The Lack Of Institutional Ownership Tell Us About Chemcon Speciality Chemicals?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Chemcon Speciality Chemicals, for yourself, below.

Hedge funds don't have many shares in Chemcon Speciality Chemicals. Looking at our data, we can see that the largest shareholder is the CEO Kamalkumar Aggarwal with 30% of shares outstanding. With 29% and 8.3% of the shares outstanding respectively, Navdeep Goyal and Nareshkumar Goyal are the second and third largest shareholders. Interestingly, the second-largest shareholder, Navdeep Goyal is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Chemcon Speciality Chemicals

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

Our information suggests that insiders own more than half of Chemcon Speciality Chemicals Limited. This gives them effective control of the company. Given it has a market cap of ₹11b, that means they have ₹8.5b worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

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.

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 - Chemcon Speciality Chemicals has 2 warning signs (and 1 which is potentially serious) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.