State or government in MOIL Limited (NSE:MOIL) are its biggest bettors, and their bets paid off as stock gained 6.4% last week

Key Insights

• Significant control over MOIL by state or government implies that the general public has more power to influence management and governance-related decisions
• Ministry of Steel Government of India owns 53% of the company
• Institutions own 14% of MOIL

Every investor in MOIL Limited (NSE:MOIL) should be aware of the most powerful shareholder groups. With 65% stake, state or government possess the maximum shares in the company. 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 6.4% gain.

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

View our latest analysis for MOIL

What Does The Institutional Ownership Tell Us About MOIL?

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 MOIL 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. 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 MOIL's historic earnings and revenue below, but keep in mind there's always more to the story.

MOIL is not owned by hedge funds. Ministry of Steel Government of India is currently the largest shareholder, with 53% of shares outstanding. This implies that they have majority interest control of the future of the company. With 6.0% and 5.4% of the shares outstanding respectively, Government of Maharashtra and Government of Madhya Pradesh are the second and third largest shareholders.

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

Insider Ownership Of MOIL

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 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

The general public-- including retail investors -- own 21% 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. Take risks for example - MOIL has 1 warning sign we think you should be aware of.

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.

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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.