Heranba Industries Limited's (NSE:HERANBA) most bullish insider is CEO Raghuram Shetty, and their holdings value went up by 10% last week

By
Simply Wall St
Published
March 18, 2022
NSEI:HERANBA
Source: Shutterstock

If you want to know who really controls Heranba Industries Limited (NSE:HERANBA), then you'll have to look at the makeup of its share registry. With 74% stake, individual insiders possess the maximum shares in the company. 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 10% gain.

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

See our latest analysis for Heranba Industries

ownership-breakdown
NSEI:HERANBA Ownership Breakdown March 18th 2022

What Does The Institutional Ownership Tell Us About Heranba 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.

Institutions have a very small stake in Heranba Industries. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

earnings-and-revenue-growth
NSEI:HERANBA Earnings and Revenue Growth March 18th 2022

We note that hedge funds don't have a meaningful investment in Heranba Industries. The company's CEO Raghuram Shetty is the largest shareholder with 35% of shares outstanding. In comparison, the second and third largest shareholders hold about 23% and 8.1% of the stock. Note that two of the top three shareholders are also Top Key Executive and Member of the Board of Directors, respectively, once again pointing to significant ownership by company insiders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Heranba Industries

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders own more than half of Heranba Industries Limited. This gives them effective control of the company. So they have a ₹19b stake in this ₹26b 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 21% stake in Heranba Industries. 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:

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. For instance, we've identified 1 warning sign for Heranba Industries that you should be aware of.

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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