Ajanta Pharma Limited (NSE:AJANTPHARM) insiders have significant skin in the game with 42% ownership

Key Insights

• Significant insider control over Ajanta Pharma implies vested interests in company growth
• 53% of the business is held by the top 4 shareholders
• Institutional ownership in Ajanta Pharma is 22%

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If you want to know who really controls Ajanta Pharma Limited (NSE:AJANTPHARM), then you'll have to look at the makeup of its share registry. With 42% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

So, insiders of Ajanta Pharma have a lot at stake and every decision they make on the company’s future is important to them from a financial point of view.

In the chart below, we zoom in on the different ownership groups of Ajanta Pharma.

View our latest analysis for Ajanta Pharma

What Does The Institutional Ownership Tell Us About Ajanta Pharma?

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 Ajanta Pharma 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Ajanta Pharma, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Ajanta Pharma. Our data suggests that Rajesh Agrawal, who is also the company's Co-Chief Executive Officer, holds the most number of shares at 14%. 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. Yogesh Agrawal is the second largest shareholder owning 14% of common stock, and Ravi Agrawal holds about 13% of the company stock. Interestingly, the second-largest shareholder, Yogesh Agrawal is also Co-Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

On looking further, we found that 53% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Ajanta Pharma

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own a reasonable proportion of Ajanta Pharma Limited. It is very interesting to see that insiders have a meaningful ₹131b stake in this ₹310b 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 12% stake in Ajanta Pharma. 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 24%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Ajanta Pharma better, we need to consider many other factors. Be aware that Ajanta Pharma is showing 1 warning sign in our investment analysis , 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.