Individual investors invested in Kiri Industries Limited (NSE:KIRIINDUS) up 11% last week, insiders too were rewarded

Key Insights

• Kiri Industries' significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 54% of the business is held by the top 8 shareholders
• Insiders own 21% of Kiri Industries

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A look at the shareholders of Kiri Industries Limited (NSE:KIRIINDUS) can tell us which group is most powerful. With 26% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While individual investors were the group that benefitted the most from last week’s ₹4.1b market cap gain, insiders too had a 21% share in those profits.

In the chart below, we zoom in on the different ownership groups of Kiri Industries.

View our latest analysis for Kiri Industries

What Does The Institutional Ownership Tell Us About Kiri 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 Kiri Industries. 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. 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 Kiri Industries' earnings history below. Of course, the future is what really matters.

It would appear that 8.7% of Kiri Industries shares are controlled by hedge funds. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Our data shows that Anupama Kiri is the largest shareholder with 12% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.7% and 6.5% of the stock. Additionally, the company's CEO Manishbhai Kiri directly holds 5.0% of the total shares outstanding.

We did some more digging and found that 8 of the top shareholders account for roughly 54% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Kiri 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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 most recent data indicates that insiders own a reasonable proportion of Kiri Industries Limited. Insiders own ₹8.5b worth of shares in the ₹40b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 26% 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 Equity Ownership

Private equity firms hold a 5.8% stake in Kiri Industries. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

It seems that Private Companies own 18%, of the Kiri Industries stock. 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 Kiri Industries better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Kiri Industries you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.