Sree Rayalaseema Hi-Strength Hypo Limited's (NSE:SRHHYPOLTD) market cap surged ₹847m last week, private companies who have a lot riding on the company were rewarded

Key Insights

• The considerable ownership by private companies in Sree Rayalaseema Hi-Strength Hypo indicates that they collectively have a greater say in management and business strategy
• 56% of the business is held by the top 3 shareholders
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Our free stock report includes 1 warning sign investors should be aware of before investing in Sree Rayalaseema Hi-Strength Hypo. Read for free now.

A look at the shareholders of Sree Rayalaseema Hi-Strength Hypo Limited (NSE:SRHHYPOLTD) can tell us which group is most powerful. 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).

As a result, private companies collectively scored the highest last week as the company hit ₹9.2b market cap following a 10% gain in the stock.

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

Check out 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. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. 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.

We note that hedge funds don't have a meaningful investment in Sree Rayalaseema Hi-Strength Hypo. The company's largest shareholder is TGV Group, with ownership of 41%. Meanwhile, the second and third largest shareholders, hold 8.8% and 6.8%, of the shares outstanding, respectively.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. 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 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.

Our most recent data indicates that insiders own some shares in Sree Rayalaseema Hi-Strength Hypo Limited. It has a market capitalization of just ₹9.2b, and insiders have ₹710m worth of shares, in their own names. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

With a 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sree Rayalaseema Hi-Strength Hypo. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 53%, of the company's shares. 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:

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. For example, we've discovered 1 warning sign for Sree Rayalaseema Hi-Strength Hypo 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.