Institutions along with public companies who hold considerable shares inParadeep Phosphates Limited (NSE:PARADEEP) come under pressure; lose 6.7% of holdings value

Key Insights

• Significant control over Paradeep Phosphates by public companies implies that the general public has more power to influence management and governance-related decisions
• Zuari Industries Limited owns 56% of the company
• Institutions own 30% of Paradeep Phosphates

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To get a sense of who is truly in control of Paradeep Phosphates Limited (NSE:PARADEEP), 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 56% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of public companies took a hit after last week’s 6.7% price drop, institutions with their 30% holdings also suffered.

Let's take a closer look to see what the different types of shareholders can tell us about Paradeep Phosphates.

Check out our latest analysis for Paradeep Phosphates

What Does The Institutional Ownership Tell Us About Paradeep Phosphates?

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.

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

Paradeep Phosphates is not owned by hedge funds. Zuari Industries Limited is currently the largest shareholder, with 56% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Meanwhile, the second and third largest shareholders, hold 5.6% and 5.0%, of the shares outstanding, respectively.

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 Paradeep Phosphates

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our information suggests that Paradeep Phosphates Limited insiders own under 1% of the company. Keep in mind that it's a big company, and the insiders own ₹16m worth of shares. The absolute value might be more important than the proportional share. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

With a 14% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Paradeep Phosphates. 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.

Public Company Ownership

Public companies currently own 56% of Paradeep Phosphates stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Paradeep Phosphates better, we need to consider many other factors. For instance, we've identified 1 warning sign for Paradeep Phosphates that you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.