Institutions profited after Just Dial Limited's (NSE:JUSTDIAL) market cap rose ₹4.5b last week but public companies profited the most

Key Insights

• Significant control over Just Dial by public companies implies that the general public has more power to influence management and governance-related decisions
• Reliance Industries Limited owns 64% of the company
• Insider ownership in Just Dial is 12%

Every investor in Just Dial Limited (NSE:JUSTDIAL) should be aware of the most powerful shareholder groups. We can see that public companies own the lion's share in the company with 64% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While public companies were the group that benefitted the most from last week’s ₹4.5b market cap gain, institutions too had a 14% share in those profits.

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

See our latest analysis for Just Dial

What Does The Institutional Ownership Tell Us About Just Dial?

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.

We can see that Just Dial does have institutional investors; and they hold a good portion of the company's stock. 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 Just Dial's earnings history below. Of course, the future is what really matters.

Just Dial is not owned by hedge funds. The company's largest shareholder is Reliance Industries Limited, with ownership of 64%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Meanwhile, the second and third largest shareholders, hold 7.8% and 4.3%, of the shares outstanding, respectively. Venkatachalam Mani, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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. 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 Just Dial

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 maintain a significant holding in Just Dial Limited. It is very interesting to see that insiders have a meaningful ₹12b stake in this ₹104b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. 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 10% stake in Just Dial. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

It appears to us that public companies own 64% of Just Dial. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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 2 warning signs for Just Dial that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.