Owning 54% in Ajanta Pharma Limited (NSE:AJANTPHARM) means that insiders are heavily invested in the company's future

Key Insights

• Ajanta Pharma's significant insider ownership suggests inherent interests in company's expansion
• A total of 4 investors have a majority stake in the company with 54% ownership
• Institutional ownership in Ajanta Pharma is 20%

To get a sense of who is truly in control of Ajanta Pharma Limited (NSE:AJANTPHARM), it is important to understand the ownership structure of the business. With 54% 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 it follows, every decision made by insiders of Ajanta Pharma regarding the company's future would be crucial to them.

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

Check out 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.

As you can see, institutional investors have a fair amount of stake in Ajanta Pharma. 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. 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. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Ajanta Pharma's case, its Co-Chief Executive Officer, Rajesh Agrawal, is the largest shareholder, holding 14% of shares outstanding. 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 54% 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.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Ajanta Pharma

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. 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 the majority of Ajanta Pharma Limited. This means they can collectively make decisions for the company. That means insiders have a very meaningful ₹81b stake in this ₹152b business. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

With a 14% ownership, the general public, mostly comprising of individual investors, have some degree of sway over 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

It seems that Private Companies own 13%, of the Ajanta Pharma stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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. For example, we've discovered 1 warning sign for Ajanta Pharma that you should be aware of before investing here.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.