The recent 12% gain must have brightened CEO Rajesh Aggarwal's week, Insecticides (India) Limited's (NSE:INSECTICID) most bullish insider

Key Insights

• Significant insider control over Insecticides (India) implies vested interests in company growth
• 54% of the business is held by the top 2 shareholders
• 14% of Insecticides (India) is held by Institutions

Every investor in Insecticides (India) Limited (NSE:INSECTICID) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 70% 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 ₹2.5b last week.

Let's delve deeper into each type of owner of Insecticides (India), beginning with the chart below.

Check out our latest analysis for Insecticides (India)

What Does The Institutional Ownership Tell Us About Insecticides (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.

We can see that Insecticides (India) does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Insecticides (India)'s historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Insecticides (India). The company's CEO Rajesh Aggarwal is the largest shareholder with 31% of shares outstanding. In comparison, the second and third largest shareholders hold about 23% and 16% 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.

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 54% stake.

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

Insider Ownership Of Insecticides (India)

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

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.

It seems that insiders own more than half the Insecticides (India) Limited stock. This gives them a lot of power. So they have a ₹17b stake in this ₹24b 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 13% stake in Insecticides (India). While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Insecticides (India) better, we need to consider many other factors. For instance, we've identified 1 warning sign for Insecticides (India) that you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com