S H Kelkar and Company Limited (NSE:SHK) adds ₹3.7b in market cap and insiders have a 38% stake in that gain

Key Insights

• Insiders appear to have a vested interest in S H Kelkar's growth, as seen by their sizeable ownership
• A total of 4 investors have a majority stake in the company with 57% ownership
• Institutional ownership in S H Kelkar is 11%

If you want to know who really controls S H Kelkar and Company Limited (NSE:SHK), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 38% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by ₹3.7b last week.

In the chart below, we zoom in on the different ownership groups of S H Kelkar.

Check out our latest analysis for S H Kelkar

What Does The Institutional Ownership Tell Us About S H Kelkar?

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.

We can see that S H Kelkar does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 S H Kelkar's historic earnings and revenue below, but keep in mind there's always more to the story.

S H Kelkar is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Ramesh Vaze with 22% of shares outstanding. In comparison, the second and third largest shareholders hold about 14% and 11% of the stock. Kedar Vaze, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

On looking further, we found that 57% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of S H Kelkar

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems insiders own a significant proportion of S H Kelkar and Company Limited. Insiders own ₹14b worth of shares in the ₹37b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over S H Kelkar. 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 21%, of the S H Kelkar stock. 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.

Public Company Ownership

It appears to us that public companies own 10% of S H Kelkar. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 6 warning signs for S H Kelkar (2 are concerning!) that you should be aware of before investing here.

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.