Fine Organic Industries Limited's (NSE:FINEORG) largest shareholder, CEO Tushar Shah sees holdings value fall by 7.3% following recent drop

Key Insights

• Insiders appear to have a vested interest in Fine Organic Industries' growth, as seen by their sizeable ownership
• A total of 4 investors have a majority stake in the company with 59% ownership
• Institutions own 13% of Fine Organic Industries

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 75% 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.

As a result, insiders as a group endured the highest losses after market cap fell by ₹12b.

Let's take a closer look to see what the different types of shareholders can tell us about Fine Organic Industries.

Check out our latest analysis for Fine Organic Industries

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

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.

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

Fine Organic Industries is not owned by hedge funds. The company's CEO Tushar Shah is the largest shareholder with 17% of shares outstanding. With 17% and 15% of the shares outstanding respectively, Jayen Shah and Mukesh Shah are the second and third largest shareholders. Note that two of the top three shareholders are also Senior Key Executive 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Fine Organic Industries

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 most recent data indicates that insiders own the majority of Fine Organic Industries Limited. This means they can collectively make decisions for the company. Given it has a market cap of ₹148b, that means insiders have a whopping ₹111b worth of shares in their own names. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 12% stake in the company, and hence can't easily be ignored. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Fine Organic Industries better, we need to consider many other factors.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.