In spite of recent selling, insiders still have the largest holding in Pidilite Industries Limited (NSE:PIDILITIND) with a 51% ownership

Key Insights

• Pidilite Industries' significant insider ownership suggests inherent interests in company's expansion
• The top 7 shareholders own 53% of the company
• Insiders have been selling lately

A look at the shareholders of Pidilite Industries Limited (NSE:PIDILITIND) can tell us which group is most powerful. The group holding the most number of shares in the company, around 51% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Despite selling some shares recently, insiders control a good portion of the company's stock.

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

View our latest analysis for Pidilite Industries

What Does The Institutional Ownership Tell Us About Pidilite Industries?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Pidilite Industries does have institutional investors; and they hold a good portion of the company's stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Pidilite Industries' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Pidilite Industries. Our data suggests that Madhukar Parekh, who is also the company's Top Key Executive, holds the most number of shares at 11%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. With 11% and 9.2% of the shares outstanding respectively, Narendrakumar Parekh and Ajay Parekh are the second and third largest shareholders. Interestingly, the third-largest shareholder, Ajay Parekh is also a Vice Chairman, again, indicating strong insider ownership amongst the company's top shareholders.

We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Pidilite Industries

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.

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.

It seems that insiders own more than half the Pidilite Industries Limited stock. This gives them a lot of power. Insiders own ₹759b worth of shares in the ₹1.5t company. That's extraordinary! Most would be pleased to see the board is investing alongside them. You may wish to discover if they 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 Pidilite Industries. 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

Our data indicates that Private Companies hold 13%, 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 Pidilite Industries better, we need to consider many other factors. For example, we've discovered 1 warning sign for Pidilite Industries that you should be aware of before investing here.

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.