Sree Rayalaseema Hi-Strength Hypo Limited's (NSE:SRHHYPOLTD) market cap dropped ₹1.6b last week; Private companies bore the brunt

Key Insights

• Sree Rayalaseema Hi-Strength Hypo's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 3 shareholders own 56% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

If you want to know who really controls Sree Rayalaseema Hi-Strength Hypo Limited (NSE:SRHHYPOLTD), 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 53% to be precise, is private companies. 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 12% decline in share price, private companies suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Sree Rayalaseema Hi-Strength Hypo.

View our latest analysis for Sree Rayalaseema Hi-Strength Hypo

What Does The Lack Of Institutional Ownership Tell Us About Sree Rayalaseema Hi-Strength Hypo?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Sree Rayalaseema Hi-Strength Hypo's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Sree Rayalaseema Hi-Strength Hypo is not owned by hedge funds. Our data shows that TGV Group is the largest shareholder with 41% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.8% and 6.5%, of the shares outstanding, respectively.

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 56% 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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Sree Rayalaseema Hi-Strength Hypo

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Shareholders would probably be interested to learn that insiders own shares in Sree Rayalaseema Hi-Strength Hypo Limited. As individuals, the insiders collectively own ₹883m worth of the ₹11b company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 32% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 53%, of the Sree Rayalaseema Hi-Strength Hypo 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Sree Rayalaseema Hi-Strength Hypo better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Sree Rayalaseema Hi-Strength Hypo .

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.