Indian Metals and Ferro Alloys Limited's (NSE:IMFA) most bullish insider is CEO Subhrakant Panda, and their holdings value went up by 9.4% last week

Key Insights

• Significant insider control over Indian Metals and Ferro Alloys implies vested interests in company growth
• 54% of the company is held by a single shareholder (Subhrakant Panda)
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

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Every investor in Indian Metals and Ferro Alloys Limited (NSE:IMFA) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 59% 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 ₹5.7b last week.

In the chart below, we zoom in on the different ownership groups of Indian Metals and Ferro Alloys.

See our latest analysis for Indian Metals and Ferro Alloys

What Does The Lack Of Institutional Ownership Tell Us About Indian Metals and Ferro Alloys?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

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. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Indian Metals and Ferro Alloys, for yourself, below.

Indian Metals and Ferro Alloys is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Subhrakant Panda with 54% of shares outstanding. This implies that they possess majority interests and have significant control over the company. Investors usually consider it a good sign when the company leadership has such a significant stake, as this is widely perceived to increase the chance that the management will act in the best interests of the company. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 2.3% by the third-largest shareholder.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Indian Metals and Ferro Alloys

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. 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.

Our information suggests that insiders own more than half of Indian Metals and Ferro Alloys Limited. This gives them effective control of the company. So they have a ₹39b stake in this ₹67b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 25% stake in Indian Metals and Ferro Alloys. 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.

Private Company Ownership

Our data indicates that Private Companies hold 15%, 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 Indian Metals and Ferro Alloys better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Indian Metals and Ferro Alloys .

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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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.