The recent 4.7% gain must have brightened CEO Shashikant Garware's week, Garware Hi-Tech Films Limited's (NSE:GRWRHITECH) most bullish insider

Key Insights

• Significant insider control over Garware Hi-Tech Films implies vested interests in company growth
• A total of 3 investors have a majority stake in the company with 52% ownership
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Garware Hi-Tech Films Limited (NSE:GRWRHITECH) should be aware of the most powerful shareholder groups. With 58% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by ₹4.4b last week.

Let's take a closer look to see what the different types of shareholders can tell us about Garware Hi-Tech Films.

Check out our latest analysis for Garware Hi-Tech Films

What Does The Institutional Ownership Tell Us About Garware Hi-Tech Films?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Garware Hi-Tech Films. 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 Garware Hi-Tech Films, (below). Of course, keep in mind that there are other factors to consider, too.

Garware Hi-Tech Films is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Shashikant Garware with 43% of shares outstanding. With 5.3% and 3.6% of the shares outstanding respectively, B.D.Garware Research Centre and Sarita Ramsay are the second and third largest shareholders. Interestingly, the third-largest shareholder, Sarita Ramsay is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence 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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Garware Hi-Tech Films

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Garware Hi-Tech Films Limited. This means they can collectively make decisions for the company. Given it has a market cap of ₹97b, that means insiders have a whopping ₹56b worth of shares in their own names. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public, who are usually individual investors, hold a 24% stake in Garware Hi-Tech Films. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 9.1%, of the company's shares. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Garware Hi-Tech Films better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Garware Hi-Tech Films , and understanding them should be part of your investment process.

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.