Linde India Limited's (NSE:LINDEINDIA) stock price dropped 3.3% last week; public companies would not be happy

Key Insights

• The considerable ownership by public companies in Linde India indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is Linde plc with a 75% stake
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

We check all companies for important risks. See what we found for Linde India in our free report.

To get a sense of who is truly in control of Linde India Limited (NSE:LINDEINDIA), it is important to understand the ownership structure of the business. We can see that public companies own the lion's share in the company with 75% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 3.3% decline in share price, public companies suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Linde India.

Check out our latest analysis for Linde India

What Does The Institutional Ownership Tell Us About Linde India?

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.

As you can see, institutional investors have a fair amount of stake in Linde India. 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 Linde India's historic earnings and revenue below, but keep in mind there's always more to the story.

Linde India is not owned by hedge funds. Our data shows that Linde plc is the largest shareholder with 75% of shares outstanding. This implies that they have majority interest control of the future of the company. With 2.9% and 2.0% of the shares outstanding respectively, Nippon Life India Asset Management Limited and Manish Jain are the second and third largest shareholders.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Linde India

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

We can see that insiders own shares in Linde India Limited. This is a big company, so it is good to see this level of alignment. Insiders own ₹16b worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 14% stake in Linde India. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

Public companies currently own 75% of Linde India stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

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.

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.