JSW Steel Limited's (NSE:JSWSTEEL) largest shareholders are private companies with 35% ownership, public companies own 27%

Key Insights

• Significant control over JSW Steel by private companies implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 6 shareholders
• 18% of JSW Steel is held by Institutions

If you want to know who really controls JSW Steel Limited (NSE:JSWSTEEL), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 35% to be precise, is private companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And public companies on the other hand have a 27% ownership in the company.

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

Check out our latest analysis for JSW Steel

What Does The Institutional Ownership Tell Us About JSW Steel?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

JSW Steel already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 JSW Steel's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in JSW Steel. JFE Holdings, Inc. is currently the largest shareholder, with 15% of shares outstanding. JSW Techno Projects Management Limited is the second largest shareholder owning 11% of common stock, and JSW Holdings Limited holds about 7.4% of the company stock.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of JSW Steel

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 data suggests that insiders own under 1% of JSW Steel Limited in their own names. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own ₹16b worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 17% stake in the company, and hence can't easily be ignored. 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 35%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Public Company Ownership

Public companies currently own 27% of JSW Steel stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand JSW Steel better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with JSW Steel (including 1 which can't be ignored) .

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.