Balaji Telefilms Limited (NSE:BALAJITELE) adds ₹950m in market cap and insiders have a 29% stake in that gain

Key Insights

• Insiders appear to have a vested interest in Balaji Telefilms' growth, as seen by their sizeable ownership
• The top 4 shareholders own 55% of the company
• 13% of Balaji Telefilms is held by Institutions

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A look at the shareholders of Balaji Telefilms Limited (NSE:BALAJITELE) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 29% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders were the biggest beneficiaries of last week’s 12% gain.

In the chart below, we zoom in on the different ownership groups of Balaji Telefilms.

View our latest analysis for Balaji Telefilms

What Does The Institutional Ownership Tell Us About Balaji Telefilms?

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 Balaji Telefilms. 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 Balaji Telefilms, (below). Of course, keep in mind that there are other factors to consider, too.

Our data indicates that hedge funds own 9.6% of Balaji Telefilms. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Our data shows that Reliance Industries Limited is the largest shareholder with 21% of shares outstanding. Ektaa Kapoor is the second largest shareholder owning 15% of common stock, and Atyant Capital Management Limited holds about 9.6% of the company stock. Ektaa Kapoor, who is the second-largest shareholder, also happens to hold the title of Senior Key Executive.

Our research also brought to light the fact that roughly 55% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. 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 Balaji Telefilms

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 information suggests that insiders maintain a significant holding in Balaji Telefilms Limited. It has a market capitalization of just ₹8.9b, and insiders have ₹2.6b worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Balaji Telefilms. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Public Company Ownership

We can see that public companies hold 22% of the Balaji Telefilms shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Balaji Telefilms , and understanding them should be part of your investment process.

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.