Private companies in Kesoram Industries Limited (NSE:KESORAMIND) are its biggest bettors, and their bets paid off as stock gained 12% last week

Key Insights

• The considerable ownership by private companies in Kesoram Industries indicates that they collectively have a greater say in management and business strategy
• The top 4 shareholders own 51% of the company
• Institutions own 16% of Kesoram Industries

If you want to know who really controls Kesoram Industries Limited (NSE:KESORAMIND), 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 41% 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.

Clearly, private companies benefitted the most after the company's market cap rose by ₹3.9b last week.

Let's delve deeper into each type of owner of Kesoram Industries, beginning with the chart below.

View our latest analysis for Kesoram Industries

What Does The Institutional Ownership Tell Us About Kesoram Industries?

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.

As you can see, institutional investors have a fair amount of stake in Kesoram Industries. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Kesoram Industries, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Kesoram Industries. Manav Investment & Trading Company Limited is currently the largest shareholder, with 22% of shares outstanding. Pilani Investment and Industries Corporation Limited is the second largest shareholder owning 15% of common stock, and Mundhra Homes Private Limited holds about 9.4% of the company stock.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Kesoram Industries

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 less than 1% of Kesoram Industries Limited. However, it's possible that insiders might have an indirect interest through a more complex structure. It appears that the board holds about ₹123m worth of stock. This compares to a market capitalization of ₹35b. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Kesoram Industries. 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

We can see that Private Companies own 41%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

Public companies currently own 17% of Kesoram Industries stock. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Kesoram Industries better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

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

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.