How Much Of Balaji Telefilms Limited (NSE:BALAJITELE) Do Insiders Own?

If you want to know who really controls Balaji Telefilms Limited (NSE:BALAJITELE), then you’ll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, ‘Don’t tell me what you think, tell me what you have in your portfolio.

With a market capitalization of ₹5.3b, Balaji Telefilms is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. Let’s delve deeper into each type of owner, to discover more about Balaji Telefilms.

Check out our latest analysis for Balaji Telefilms

NSEI:BALAJITELE Ownership Summary, January 18th 2020
NSEI:BALAJITELE Ownership Summary, January 18th 2020

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.

Balaji Telefilms already has institutions on the share registry. Indeed, they own 11% of the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at Balaji Telefilms’s earnings history, below. Of course, the future is what really matters.

NSEI:BALAJITELE Income Statement, January 18th 2020
NSEI:BALAJITELE Income Statement, January 18th 2020

It looks like hedge funds own 8.3% of Balaji Telefilms shares. 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. Reliance Industries Limited is currently the company’s largest shareholder with 25% of shares outstanding. Next, we have Ekta Kapoor and Shobha Kapoor as the second and third largest shareholders, holding 18% and 11%, of the shares outstanding, respectively. They also hold the title of Senior Key Executive and Member of the Board of Directors, respectively, suggesting that these insiders have a personal stake in the company.

Further, we found that the top 3 shareholders have a combined ownership of 54% in the company, meaning that they are powerful enough to influence the decisions of the company.

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

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. 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.

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 maintain a significant holding in Balaji Telefilms Limited. Insiders have a ₹1.8b stake in this ₹5.3b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public holds a 16% stake in BALAJITELE. 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.

Private Company Ownership

We can see that Private Companies own 5.8%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it’s hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Public Company Ownership

It appears to us that public companies own 25% of BALAJITELE. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand Balaji Telefilms better, we need to consider many other factors. To that end, you should learn about the 4 warning signs we’ve spotted with Balaji Telefilms (including 1 which is is a bit unpleasant) .

If you would prefer check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, backed by strong financial data.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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