Deepak Fertilisers And Petrochemicals Corporation Limited's (NSE:DEEPAKFERT) market cap dropped ₹12b last week; Public companies bore the brunt

Key Insights

• Deepak Fertilisers And Petrochemicals' significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 4 shareholders own 52% of the company
• Institutions own 26% of Deepak Fertilisers And Petrochemicals

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If you want to know who really controls Deepak Fertilisers And Petrochemicals Corporation Limited (NSE:DEEPAKFERT), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are public companies with 35% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 5.6% decline in share price, public companies suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Deepak Fertilisers And Petrochemicals.

View our latest analysis for Deepak Fertilisers And Petrochemicals

What Does The Institutional Ownership Tell Us About Deepak Fertilisers And Petrochemicals?

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.

As you can see, institutional investors have a fair amount of stake in Deepak Fertilisers And Petrochemicals. 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. 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 Deepak Fertilisers And Petrochemicals' historic earnings and revenue below, but keep in mind there's always more to the story.

Deepak Fertilisers And Petrochemicals is not owned by hedge funds. The company's largest shareholder is Deepak Nitrite Limited, with ownership of 35%. In comparison, the second and third largest shareholders hold about 8.8% and 4.4% of the stock.

On looking further, we found that 52% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. 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 Deepak Fertilisers And Petrochemicals

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Shareholders would probably be interested to learn that insiders own shares in Deepak Fertilisers And Petrochemicals Corporation Limited. The insiders have a meaningful stake worth ₹4.0b. 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

With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Deepak Fertilisers And Petrochemicals. 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 10%, 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

We can see that public companies hold 35% of the Deepak Fertilisers And Petrochemicals shares on issue. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Deepak Fertilisers And Petrochemicals you should be aware of.

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.