Sudarshan Chemical Industries Limited's (NSE:SUDARSCHEM) top holders are insiders and they are likely disappointed by the recent 9.1% drop

Key Insights

• Significant insider control over Sudarshan Chemical Industries implies vested interests in company growth
• 52% of the business is held by the top 8 shareholders
• Institutional ownership in Sudarshan Chemical Industries is 27%

A look at the shareholders of Sudarshan Chemical Industries Limited (NSE:SUDARSCHEM) can tell us which group is most powerful. The group holding the most number of shares in the company, around 44% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 9.1% decline in share price, insiders suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Sudarshan Chemical Industries.

See our latest analysis for Sudarshan Chemical Industries

What Does The Institutional Ownership Tell Us About Sudarshan Chemical 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.

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

Hedge funds don't have many shares in Sudarshan Chemical Industries. Pradeep Kumar Rathi is currently the company's largest shareholder with 12% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.1% and 7.9% of the stock. Anuj Rathi, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Additionally, the company's CEO Rajesh Rathi directly holds 6.1% of the total shares outstanding.

We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Sudarshan Chemical Industries

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own a reasonable proportion of Sudarshan Chemical Industries Limited. Insiders own ₹30b worth of shares in the ₹69b 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

The general public-- including retail investors -- own 25% stake in the company, and hence can't easily be ignored. 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 3.4%, of the company's shares. 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 Sudarshan Chemical Industries better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Sudarshan Chemical Industries you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.