Institutional owners may take dramatic actions as Navin Fluorine International Limited's (NSE:NAVINFLUOR) recent 6.3% drop adds to one-year losses

Key Insights

• Given the large stake in the stock by institutions, Navin Fluorine International's stock price might be vulnerable to their trading decisions
• 50% of the business is held by the top 8 shareholders
• Insiders have been selling lately

If you want to know who really controls Navin Fluorine International Limited (NSE:NAVINFLUOR), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are institutions with 43% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And institutional investors saw their holdings value drop by 6.3% last week. This set of investors may especially be concerned about the current loss, which adds to a one-year loss of 24% for shareholders. Often called “market movers", institutions wield significant power in influencing the price dynamics of any stock. As a result, if the decline continues, institutional investors may be pressured to sell Navin Fluorine International which might hurt individual investors.

In the chart below, we zoom in on the different ownership groups of Navin Fluorine International.

Check out our latest analysis for Navin Fluorine International

What Does The Institutional Ownership Tell Us About Navin Fluorine International?

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.

Navin Fluorine International already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Navin Fluorine International, (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 Navin Fluorine International. Looking at our data, we can see that the largest shareholder is Mafatlal Impex Pvt Ltd with 26% of shares outstanding. With 9.7% and 3.0% of the shares outstanding respectively, Life Insurance Corporation of India, Asset Management Arm and Goldman Sachs Asset Management, L.P. are the second and third largest shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Navin Fluorine International

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. 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.

We can report that insiders do own shares in Navin Fluorine International Limited. The insiders have a meaningful stake worth ₹4.7b. Most would see this as a real positive. It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Navin Fluorine International. 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.

Private Company Ownership

Our data indicates that Private Companies hold 27%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Navin Fluorine International better, we need to consider many other factors. To that end, you should be aware of the 3 warning signs we've spotted with Navin Fluorine International .

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.