A ₹4.7b drop in the market cap of Kirloskar Industries Limited (NSE:KIRLOSIND) is not what insiders like to see after purchasing shares recently

Key Insights

• Insiders appear to have a vested interest in Kirloskar Industries' growth, as seen by their sizeable ownership
• The top 3 shareholders own 51% of the company
• Insiders have been buying lately

A look at the shareholders of Kirloskar Industries Limited (NSE:KIRLOSIND) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 71% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And looking at our data, we can see that insiders have bought shares recently. However, with market cap down by ₹4.7b over the last week, their expectations were far from met.

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

See our latest analysis for Kirloskar Industries

What Does The Institutional Ownership Tell Us About Kirloskar Industries?

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.

Less than 5% of Kirloskar Industries is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

We note that hedge funds don't have a meaningful investment in Kirloskar Industries. Looking at our data, we can see that the largest shareholder is Rahul Kirloskar with 22% of shares outstanding. In comparison, the second and third largest shareholders hold about 17% and 11% of the stock. Additionally, the company's CEO Mahesh Chhabria directly holds 1.2% of the total shares outstanding.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Kirloskar Industries

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 the majority of Kirloskar Industries Limited. This means they can collectively make decisions for the company. Given it has a market cap of ₹51b, that means they have ₹37b worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 24% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

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 be aware of the 2 warning signs we've spotted with Kirloskar Industries .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.