What Kind Of Shareholders Hold The Majority In Satia Industries Limited's (NSE:SATIA) Shares?

By
Simply Wall St
Published
January 10, 2022
NSEI:SATIA
Source: Shutterstock

The big shareholder groups in Satia Industries Limited (NSE:SATIA) have power over the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

With a market capitalization of ₹9.9b, Satia Industries is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about Satia Industries.

Check out our latest analysis for Satia Industries

ownership-breakdown
NSEI:SATIA Ownership Breakdown January 10th 2022

What Does The Institutional Ownership Tell Us About Satia Industries?

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.

Satia Industries 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 Satia Industries, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NSEI:SATIA Earnings and Revenue Growth January 10th 2022

Satia Industries is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Bhai Singh with 0.6% of shares outstanding. In comparison, the second and third largest shareholders hold about 0.3% and 0.3% of the stock. Rajinder Bhandari, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

A deeper look at our ownership data shows that the top 4 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Satia Industries

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 most recent data indicates that insiders own the majority of Satia Industries Limited. This means they can collectively make decisions for the company. So they have a ₹5.3b stake in this ₹9.9b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 11% stake in the company, and hence can't easily be ignored. 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

It seems that Private Companies own 17%, of the Satia Industries stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 1 warning sign for Satia Industries that you should be aware of.

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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