Private companies are D. B. Corp Limited's (NSE:DBCORP) biggest owners and were hit after market cap dropped ₹4.4b

Key Insights

• Significant control over D. B by private companies implies that the general public has more power to influence management and governance-related decisions
• 54% of the company is held by a single shareholder (DB Consolidated Private Limited)
• Insider ownership in D. B is 18%

Every investor in D. B. Corp Limited (NSE:DBCORP) should be aware of the most powerful shareholder groups. With 56% stake, private companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While insiders, who own 18% shares weren’t spared from last week’s ₹4.4b market cap drop, private companies as a group suffered the maximum losses

Let's delve deeper into each type of owner of D. B, beginning with the chart below.

View our latest analysis for D. B

What Does The Institutional Ownership Tell Us About D. B?

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.

D. B already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 D. B's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in D. B. DB Consolidated Private Limited is currently the company's largest shareholder with 54% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. For context, the second largest shareholder holds about 9.3% of the shares outstanding, followed by an ownership of 4.7% by the third-largest shareholder. Sudhir Agarwal, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of D. B

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.

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 most recent data indicates that insiders own a reasonable proportion of D. B. Corp Limited. Insiders own ₹8.4b worth of shares in the ₹48b company. 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

The general public, who are usually individual investors, hold a 11% stake in D. B. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Equity Ownership

With an ownership of 9.3%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

It seems that Private Companies own 56%, of the D. B 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:

It's always worth thinking about the different groups who own shares in a company. But to understand D. B better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for D. B you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.