Both public companies who control a good portion of Kansai Nerolac Paints Limited (NSE:KANSAINER) along with institutions must be dismayed after last week's 4.2% decrease

Key Insights

• Significant control over Kansai Nerolac Paints by public companies implies that the general public has more power to influence management and governance-related decisions
• The largest shareholder of the company is Kansai Paint Co., Ltd. with a 75% stake
• Institutional ownership in Kansai Nerolac Paints is 13%

A look at the shareholders of Kansai Nerolac Paints Limited (NSE:KANSAINER) can tell us which group is most powerful. With 75% stake, public companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While institutions who own 13% came under pressure after market cap dropped to ₹212b last week,public companies took the most losses.

Let's delve deeper into each type of owner of Kansai Nerolac Paints, beginning with the chart below.

See our latest analysis for Kansai Nerolac Paints

What Does The Institutional Ownership Tell Us About Kansai Nerolac Paints?

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.

We can see that Kansai Nerolac Paints does have institutional investors; and they hold a good portion of the company's stock. 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 Kansai Nerolac Paints' historic earnings and revenue below, but keep in mind there's always more to the story.

Kansai Nerolac Paints is not owned by hedge funds. Our data shows that Kansai Paint Co., Ltd. is the largest shareholder with 75% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Life Insurance Corporation of India, Asset Management Arm is the second largest shareholder owning 3.6% of common stock, and Aditya Birla Sun Life AMC Limited holds about 1.3% of the company stock.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Kansai Nerolac Paints

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.

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.

Our data cannot confirm that board members are holding shares personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

With a 12% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Kansai Nerolac Paints. 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.

Public Company Ownership

We can see that public companies hold 75% of the Kansai Nerolac Paints shares on issue. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 3 warning signs we've spotted with Kansai Nerolac Paints (including 1 which is a bit unpleasant) .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.