Privi Speciality Chemicals Limited's (NSE:PRIVISCL) market cap up ₹5.6b last week, benefiting both private companies who own 55% as well as insiders

Key Insights

• The considerable ownership by private companies in Privi Speciality Chemicals indicates that they collectively have a greater say in management and business strategy
• 54% of the business is held by the top 2 shareholders
• Insiders have been buying lately

If you want to know who really controls Privi Speciality Chemicals Limited (NSE:PRIVISCL), 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 private companies with 55% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Private companies gained the most after market cap touched ₹70b last week, while insiders who own 30% also benefitted.

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

Check out our latest analysis for Privi Speciality Chemicals

What Does The Institutional Ownership Tell Us About Privi Speciality Chemicals?

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.

Institutions have a very small stake in Privi Speciality Chemicals. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

Hedge funds don't have many shares in Privi Speciality Chemicals. Our data shows that Vivira Investment And Trading Co. Pvt. Ltd is the largest shareholder with 40% of shares outstanding. Mahesh Babani is the second largest shareholder owning 14% of common stock, and Moneymart Securities Private Limited holds about 8.7% of the company stock. Mahesh Babani, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Privi Speciality Chemicals

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.

Our most recent data indicates that insiders own a reasonable proportion of Privi Speciality Chemicals Limited. Insiders have a ₹21b stake in this ₹70b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 13% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Privi Speciality Chemicals. 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

We can see that Private Companies own 55%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Privi Speciality Chemicals you should know about.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.