Despite recent sales, Gravita India Limited (NSE:GRAVITA) insiders remain the largest stockholders with 62% ownership

Key Insights

• Insiders appear to have a vested interest in Gravita India's growth, as seen by their sizeable ownership
• The top 2 shareholders own 60% of the company
• Insiders have sold recently

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Every investor in Gravita India Limited (NSE:GRAVITA) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 62% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

Insiders are at the top of the company's shareholdings despite selling some shares recently. As a result, they were also the biggest winners as market cap hit ₹135b last week.

Let's delve deeper into each type of owner of Gravita India, beginning with the chart below.

Check out our latest analysis for Gravita India

What Does The Institutional Ownership Tell Us About Gravita India?

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.

We can see that Gravita India does have institutional investors; and they hold a good portion of the company's stock. 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 Gravita India's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Gravita India. From our data, we infer that the largest shareholder is Rajat Agrawal (who also holds the title of Top Key Executive) with 36% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. Mahavir Agarwal is the second largest shareholder owning 24% of common stock, and Oxbow Capital Management (HK) Limited holds about 2.5% of the company stock.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 60% stake.

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

Insider Ownership Of Gravita India

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.

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.

It seems that insiders own more than half the Gravita India Limited stock. This gives them a lot of power. Insiders own ₹84b worth of shares in the ₹135b 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-- including retail investors -- own 20% 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:

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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Gravita India you should know about.

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.