Top Key Executive Manish Bubna, Sharda Cropchem Limited's (NSE:SHARDACROP) largest shareholder sees value of holdings go down 6.8% after recent drop

Key Insights

• Insiders appear to have a vested interest in Sharda Cropchem's growth, as seen by their sizeable ownership
• A total of 3 investors have a majority stake in the company with 54% ownership
• 13% of Sharda Cropchem is held by Institutions

To get a sense of who is truly in control of Sharda Cropchem Limited (NSE:SHARDACROP), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 76% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 6.8% decline in share price, insiders suffered the most losses.

Let's delve deeper into each type of owner of Sharda Cropchem, beginning with the chart below.

View our latest analysis for Sharda Cropchem

What Does The Institutional Ownership Tell Us About Sharda Cropchem?

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.

Sharda Cropchem already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Sharda Cropchem, (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 Sharda Cropchem. From our data, we infer that the largest shareholder is Manish Bubna (who also holds the title of Top Key Executive) with 22% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. For context, the second largest shareholder holds about 17% of the shares outstanding, followed by an ownership of 16% by the third-largest shareholder. Note that two of the top three shareholders are also Top Key Executive and Member of the Board of Directors, respectively, once again pointing to significant ownership by company insiders. Additionally, the company's CEO Ramprakash Bubna directly holds 16% of the total shares outstanding.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 54% stake.

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 Sharda Cropchem

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 Sharda Cropchem Limited. This means they can collectively make decisions for the company. So they have a ₹53b stake in this ₹70b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Sharda Cropchem better, we need to consider many other factors. Take risks for example - Sharda Cropchem has 1 warning sign we think 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.