Institutions along with private companies who hold considerable shares inSaregama India Limited (NSE:SAREGAMA) come under pressure; lose 5.3% of holdings value

Key Insights

• Significant control over Saregama India by private companies implies that the general public has more power to influence management and governance-related decisions
• The largest shareholder of the company is Composure Services Private Limited with a 54% stake
• Institutions own 23% of Saregama India

Every investor in Saregama India Limited (NSE:SAREGAMA) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 57% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of private companies took a hit after last week’s 5.3% price drop, institutions with their 23% holdings also suffered.

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

Check out our latest analysis for Saregama India

What Does The Institutional Ownership Tell Us About Saregama India?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Saregama India does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Saregama India's historic earnings and revenue below, but keep in mind there's always more to the story.

Saregama India is not owned by hedge funds. The company's largest shareholder is Composure Services Private Limited, with ownership of 54%. This implies that they have majority interest control of the future of the company. Quest Capital Markets Limited, Asset Management Arm is the second largest shareholder owning 4.8% of common stock, and Malabar Investments, LLC holds about 3.5% of the company stock. Additionally, the company's CEO Vikram Mehra directly holds 1.5% of the total shares outstanding.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Saregama 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.

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.

We can see that insiders own shares in Saregama India Limited. As individuals, the insiders collectively own ₹1.2b worth of the ₹77b company. This shows at least some alignment. 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 19% stake in Saregama 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

Our data indicates that Private Companies hold 57%, of the company's shares. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - Saregama India has 2 warning signs (and 1 which can't be ignored) we think 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.