Gravita India Limited's (NSE:GRAVITA) Top Key Executive Rajat Agrawal is the most upbeat insider, and their holdings increased by 4.9% last week

Key Insights

• Significant insider control over Gravita India implies vested interests in company growth
• The top 2 shareholders own 57% of the company
• Institutions own 18% of Gravita India

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If you want to know who really controls Gravita India Limited (NSE:GRAVITA), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 59% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 4.9% gain.

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

View our latest analysis for Gravita India

What Does The Institutional Ownership Tell Us About Gravita India?

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.

Gravita India already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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.

Gravita India 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 Gravita India's case, its Top Key Executive, Rajat Agrawal, is the largest shareholder, holding 33% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 24% and 2.5%, of the shares outstanding, respectively.

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 57% stake.

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 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 Gravita India

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

It seems that insiders own more than half the Gravita India Limited stock. This gives them a lot of power. That means insiders have a very meaningful ₹72b stake in this ₹122b business. 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

With a 23% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Gravita India. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Gravita India has 1 warning sign we think 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.