What You Need To Know About Info Edge (India) Limited's (NSE:NAUKRI) Investor Composition

By
Simply Wall St
Published
November 26, 2020
NSEI:NAUKRI

The big shareholder groups in Info Edge (India) Limited (NSE:NAUKRI) have power over the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. 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.

Info Edge (India) is a pretty big company. It has a market capitalization of ₹519b. Normally institutions would own a significant portion of a company this size. Taking a look at our data on the ownership groups (below), it seems that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about Info Edge (India).

Check out our latest analysis for Info Edge (India)

ownership-breakdown
NSEI:NAUKRI Ownership Breakdown November 27th 2020

What Does The Institutional Ownership Tell Us About Info Edge (India)?

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.

Info Edge (India) already has institutions on the share registry. Indeed, they own a respectable stake in 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. 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 Info Edge (India)'s historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
NSEI:NAUKRI Earnings and Revenue Growth November 27th 2020

We note that hedge funds don't have a meaningful investment in Info Edge (India). Our data suggests that Sanjeev Bikhchandani, who is also the company's Top Key Executive, holds the most number of shares at 25%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. In comparison, the second and third largest shareholders hold about 6.5% and 5.1% of the stock. Interestingly, the third-largest shareholder, Hitesh Oberoi is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 Info Edge (India)

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. 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.

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 Info Edge (India) Limited. It is very interesting to see that insiders have a meaningful ₹199b stake in this ₹519b business. 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 holds a 18% stake in Info Edge (India). 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

We can see that Private Companies own 8.0%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Info Edge (India) better, we need to consider many other factors. For example, we've discovered 3 warning signs for Info Edge (India) that you should be aware of before investing here.

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. 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.
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