Retail investors among DCW Limited's (NSE:DCW) largest stockholders and were hit after last week's 10% price drop

Key Insights

• Significant control over DCW by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 13 shareholders own 51% of the company
• 25% of DCW is held by insiders

To get a sense of who is truly in control of DCW Limited (NSE:DCW), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 35% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders who own 25% came under pressure after market cap dropped to ₹24b last week,retail investors took the most losses.

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

Check out our latest analysis for DCW

What Does The Institutional Ownership Tell Us About DCW?

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.

DCW 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. 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 DCW, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in DCW. Looking at our data, we can see that the largest shareholder is Sahu Brothers Pvt Ltd with 18% of shares outstanding. With 5.2% and 4.5% of the shares outstanding respectively, Ashish Jain and Vivek Jain are the second and third largest shareholders. Interestingly, the bottom two of the top three shareholders also hold the title of Senior Key Executive and Member of the Board of Directors, respectively, suggesting that these insiders have a personal stake in the company.

After doing some more digging, we found that the top 13 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

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. 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 DCW

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.

Our information suggests that insiders maintain a significant holding in DCW Limited. Insiders own ₹5.9b worth of shares in the ₹24b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over DCW. 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.

Private Company Ownership

Our data indicates that Private Companies hold 24%, of the company's shares. 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.

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. Be aware that DCW is showing 1 warning sign in our investment analysis , you should know about...

Of course this may not be the best stock to buy. So take a peek at this free 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.

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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.