Fine Organic Industries Limited (NSE:FINEORG) Senior Key Executive Jayen Shah, the company's largest shareholder sees 3.8%reduction in holdings value

Key Insights

• Insiders appear to have a vested interest in Fine Organic Industries' growth, as seen by their sizeable ownership
• 60% of the business is held by the top 4 shareholders
• 13% of Fine Organic Industries is held by Institutions

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Every investor in Fine Organic Industries Limited (NSE:FINEORG) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 76% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, insiders endured the biggest losses as the stock fell by 3.8%.

In the chart below, we zoom in on the different ownership groups of Fine Organic Industries.

View our latest analysis for Fine Organic Industries

What Does The Institutional Ownership Tell Us About Fine Organic Industries?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Fine Organic Industries 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Fine Organic Industries' earnings history below. Of course, the future is what really matters.

Fine Organic Industries is not owned by hedge funds. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Fine Organic Industries' case, its Senior Key Executive, Jayen Shah, is the largest shareholder, holding 18% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 16% and 15%, of the shares outstanding, respectively. Note that two of the top three shareholders are also Chief Executive Officer and Chairman of the Board, respectively, once again pointing to significant ownership by company insiders.

After doing some more digging, we found that the top 4 shareholders control more than half of the company's shares which essentially means that there is concentrated ownership amongst the top shareholders, most of whom happen to be insiders!

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Fine Organic Industries

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.

It seems that insiders own more than half the Fine Organic Industries Limited stock. This gives them a lot of power. Insiders own ₹110b worth of shares in the ₹145b company. That's extraordinary! It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

The general public, who are usually individual investors, hold a 11% stake in Fine Organic Industries. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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.

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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.