JK Paper Limited's (NSE:JKPAPER) last week's 9.4% decline must have disappointed public companies who have a significant stake

Key Insights

• The considerable ownership by public companies in JK Paper indicates that they collectively have a greater say in management and business strategy
• 52% of the business is held by the top 2 shareholders
• 13% of JK Paper is held by Institutions

If you want to know who really controls JK Paper Limited (NSE:JKPAPER), then you'll have to look at the makeup of its share registry. With 47% stake, public companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, public companies as a group endured the highest losses last week after market cap fell by ₹7.6b.

Let's take a closer look to see what the different types of shareholders can tell us about JK Paper.

Check out our latest analysis for JK Paper

What Does The Institutional Ownership Tell Us About JK Paper?

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.

As you can see, institutional investors have a fair amount of stake in JK Paper. 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. 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 JK Paper's historic earnings and revenue below, but keep in mind there's always more to the story.

JK Paper is not owned by hedge funds. Our data shows that Bengal & Assam Company Limited is the largest shareholder with 47% of shares outstanding. With 5.0% and 2.8% of the shares outstanding respectively, JK Paper Ltd., Employee Stock Ownership Plan and HSBC Global Asset Management (UK) Limited are the second and third largest shareholders.

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 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 JK Paper

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.

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 most recent data indicates that insiders own some shares in JK Paper Limited. It has a market capitalization of just ₹73b, and insiders have ₹2.7b worth of shares, in their own names. This shows at least some alignment. 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 31% stake in JK Paper. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

It appears to us that public companies own 47% of JK Paper. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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. Take risks for example - JK Paper has 2 warning signs we think you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.