Tatva Chintan Pharma Chem Limited's (NSE:TATVA) most bullish insider is Senior Key Executive Ajaykumar Patel, and their holdings value went up by 10% last week

Key Insights

• Insiders appear to have a vested interest in Tatva Chintan Pharma Chem's growth, as seen by their sizeable ownership
• 72% of the business is held by the top 3 shareholders
• 13% of Tatva Chintan Pharma Chem is held by Institutions

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If you want to know who really controls Tatva Chintan Pharma Chem Limited (NSE:TATVA), 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 72% 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).

As a result, insiders were the biggest beneficiaries of last week’s 10% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Tatva Chintan Pharma Chem.

Check out our latest analysis for Tatva Chintan Pharma Chem

What Does The Institutional Ownership Tell Us About Tatva Chintan Pharma Chem?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Tatva Chintan Pharma Chem already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Tatva Chintan Pharma Chem, (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 Tatva Chintan Pharma Chem. From our data, we infer that the largest shareholder is Ajaykumar Patel (who also holds the title of Senior Key Executive) with 24% 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. The second and third largest shareholders are Shekhar Somani and Chintan Shah, with an equal amount of shares to their name at 24%. Interestingly, the second and third-largest shareholders also happen to be the Senior Key Executive and Chairman of the Board, respectively. This once again signifies considerable insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Tatva Chintan Pharma Chem

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.

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.

Our most recent data indicates that insiders own the majority of Tatva Chintan Pharma Chem Limited. This means they can collectively make decisions for the company. So they have a ₹17b stake in this ₹24b 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, who are usually individual investors, hold a 15% stake in Tatva Chintan Pharma Chem. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Tatva Chintan Pharma Chem has 2 warning signs we think you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.