Mishra Dhatu Nigam Limited's (NSE:MIDHANI) biggest owners are state or government who got richer after stock soared 13% last week

Key Insights

• The considerable ownership by state or government in Mishra Dhatu Nigam indicates that they collectively have a greater say in management and business strategy
• 74% of the company is held by a single shareholder (India)
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

To get a sense of who is truly in control of Mishra Dhatu Nigam Limited (NSE:MIDHANI), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are state or government with 74% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, state or government were the biggest beneficiaries of last week’s 13% gain.

In the chart below, we zoom in on the different ownership groups of Mishra Dhatu Nigam.

See our latest analysis for Mishra Dhatu Nigam

What Does The Institutional Ownership Tell Us About Mishra Dhatu Nigam?

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.

We can see that Mishra Dhatu Nigam does have institutional investors; and they hold a good portion of the company's stock. 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 Mishra Dhatu Nigam, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Mishra Dhatu Nigam. India is currently the company's largest shareholder with 74% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. HDFC Asset Management Company Limited is the second largest shareholder owning 4.5% of common stock, and Nippon Life India Asset Management Limited holds about 1.5% of the company stock.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Mishra Dhatu Nigam

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 data cannot confirm that board members are holding shares personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.

General Public Ownership

With a 17% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Mishra Dhatu Nigam. 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:

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

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.