Hariom Pipe Industries Limited's (NSE:HARIOMPIPE) CEO Rupesh Gupta is the most upbeat insider, and their holdings increased by 11% last week

Key Insights

• Insiders appear to have a vested interest in Hariom Pipe Industries' growth, as seen by their sizeable ownership
• The top 5 shareholders own 51% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

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If you want to know who really controls Hariom Pipe Industries Limited (NSE:HARIOMPIPE), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 53% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, insiders benefitted the most after the company's market cap rose by ₹1.6b last week.

In the chart below, we zoom in on the different ownership groups of Hariom Pipe Industries.

Check out our latest analysis for Hariom Pipe Industries

What Does The Lack Of Institutional Ownership Tell Us About Hariom Pipe Industries?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. Alternatively, there might be something about the company that has kept institutional investors away. Hariom Pipe Industries might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Hariom Pipe Industries is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Rupesh Gupta with 16% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 11% and 9.2%, of the shares outstanding, respectively. Interestingly, the second-largest shareholder, Sailesh Gupta is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Hariom Pipe Industries

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.

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 Hariom Pipe Industries Limited. This means they can collectively make decisions for the company. So they have a ₹8.2b stake in this ₹15b business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 20% stake in Hariom Pipe Industries. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With an ownership of 9.2%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

We can see that Private Companies own 18%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Hariom Pipe Industries better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Hariom Pipe Industries (at least 1 which makes us a bit uncomfortable) , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.