While insiders own 16% of Vinati Organics Limited (NSE:VINATIORGA), private companies are its largest shareholders with 58% ownership

Key Insights

• Significant control over Vinati Organics by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 2 shareholders own 60% of the company
• Insiders own 16% of Vinati Organics

A look at the shareholders of Vinati Organics Limited (NSE:VINATIORGA) can tell us which group is most powerful. With 58% stake, private companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Individual insiders, on the other hand, account for 16% of the company's stockholders. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.

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

View our latest analysis for Vinati Organics

What Does The Institutional Ownership Tell Us About Vinati Organics?

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.

As you can see, institutional investors have a fair amount of stake in Vinati Organics. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Vinati Organics' historic earnings and revenue below, but keep in mind there's always more to the story.

Vinati Organics is not owned by hedge funds. Our data shows that Suchir Chemicals Pvt. Ltd. is the largest shareholder with 46% of shares outstanding. Vinod Saraf is the second largest shareholder owning 14% of common stock, and Kavita Vinod Saraf Family Trust holds about 12% of the company stock. Vinod Saraf, who is the second-largest shareholder, also happens to hold the title of Top Key Executive. In addition, we found that Vinati Mutreja, the CEO has 1.2% of the shares allocated to their name.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Vinati Organics

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 information suggests that insiders maintain a significant holding in Vinati Organics Limited. It has a market capitalization of just ₹189b, and insiders have ₹30b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 14% stake in Vinati Organics. 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

Our data indicates that Private Companies hold 58%, of the company's shares. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Vinati Organics (of which 1 is a bit unpleasant!) you should know about.

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.