Jindal Stainless Limited's (NSE:JSL) 3.3% loss last week hit both individual investors who own 52% as well as institutions

Key Insights

• The considerable ownership by private companies in Jindal Stainless indicates that they collectively have a greater say in management and business strategy
• A total of 8 investors have a majority stake in the company with 52% ownership
• Institutional ownership in Jindal Stainless is 26%

To get a sense of who is truly in control of Jindal Stainless Limited (NSE:JSL), it is important to understand the ownership structure of the business. We can see that private companies own the lion's share in the company with 52% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 3.3% decrease in the stock price last week, private companies suffered the most losses, but institutions who own 26% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of Jindal Stainless.

Check out our latest analysis for Jindal Stainless

What Does The Institutional Ownership Tell Us About Jindal Stainless?

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 Jindal Stainless. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Jindal Stainless' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Jindal Stainless. Jsl Overseas Holding Ltd is currently the largest shareholder, with 16% of shares outstanding. JSL Overseas Limited is the second largest shareholder owning 12% of common stock, and Virtuous Tradecorp Private Limited holds about 7.4% of the company stock.

We did some more digging and found that 8 of the top shareholders account for roughly 52% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Jindal Stainless

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

We can report that insiders do own shares in Jindal Stainless Limited. The insiders have a meaningful stake worth ₹22b. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 18% stake in Jindal Stainless. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 52%, 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 Jindal Stainless better, we need to consider many other factors.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.