Institutions along with private companies who hold considerable shares inMax Ventures and Industries Limited (NSE:MAXVIL) come under pressure; lose 12% of holdings value

By
Simply Wall St
Published
February 25, 2022
NSEI:MAXVIL
Source: Shutterstock

A look at the shareholders of Max Ventures and Industries Limited (NSE:MAXVIL) can tell us which group is most powerful. With 47% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions who own 30% came under pressure after market cap dropped to ₹14b last week,private companies took the most losses.

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

See our latest analysis for Max Ventures and Industries

ownership-breakdown
NSEI:MAXVIL Ownership Breakdown February 25th 2022

What Does The Institutional Ownership Tell Us About Max Ventures and Industries?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Max Ventures and Industries already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Max Ventures and Industries, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NSEI:MAXVIL Earnings and Revenue Growth February 25th 2022

Hedge funds don't have many shares in Max Ventures and Industries. Our data shows that Max Ventures Investment Holdings Private Limited is the largest shareholder with 24% of shares outstanding. In comparison, the second and third largest shareholders hold about 23% and 23% of the stock.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 69% stake.

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. 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 Max Ventures and Industries

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

Shareholders would probably be interested to learn that insiders own shares in Max Ventures and Industries Limited. It has a market capitalization of just ₹14b, and insiders have ₹787m worth of shares, in their own names. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 18% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 47%, of the shares on issue. 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 Max Ventures and Industries better, we need to consider many other factors. For instance, we've identified 1 warning sign for Max Ventures and Industries that 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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