The recent ₹2.6b market cap decrease is likely to have disappointed insiders invested in Vidhi Specialty Food Ingredients Limited (NSE:VIDHIING)

Key Insights

• Significant insider control over Vidhi Specialty Food Ingredients implies vested interests in company growth
• 61% of the business is held by the top 2 shareholders
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

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Every investor in Vidhi Specialty Food Ingredients Limited (NSE:VIDHIING) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 67% 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 as a group endured the highest losses after market cap fell by ₹2.6b.

In the chart below, we zoom in on the different ownership groups of Vidhi Specialty Food Ingredients.

See our latest analysis for Vidhi Specialty Food Ingredients

What Does The Institutional Ownership Tell Us About Vidhi Specialty Food Ingredients?

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.

Institutions have a very small stake in Vidhi Specialty Food Ingredients. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

Vidhi Specialty Food Ingredients is not owned by hedge funds. The company's largest shareholder is Pravina Manek, with ownership of 33%. Meanwhile, the second and third largest shareholders, hold 28% and 3.0%, of the shares outstanding, respectively. Bipin Manek, who is the second-largest shareholder, also happens to hold the title of Co-Chief Executive Officer.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence 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 Vidhi Specialty Food Ingredients

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 information suggests that insiders own more than half of Vidhi Specialty Food Ingredients Limited. This gives them effective control of the company. Given it has a market cap of ₹20b, that means they have ₹13b worth of shares. 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 28% stake in Vidhi Specialty Food Ingredients. 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 3.0%, of the Vidhi Specialty Food Ingredients stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

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 instance, we've identified 1 warning sign for Vidhi Specialty Food Ingredients that you should be aware of.

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.