Private companies who have a significant stake must be disappointed along with institutions after Glenmark Pharmaceuticals Limited's (NSE:GLENMARK) market cap dropped by ₹27b

Key Insights

• The considerable ownership by private companies in Glenmark Pharmaceuticals indicates that they collectively have a greater say in management and business strategy
• The top 3 shareholders own 52% of the company
• 29% of Glenmark Pharmaceuticals is held by Institutions

A look at the shareholders of Glenmark Pharmaceuticals Limited (NSE:GLENMARK) can tell us which group is most powerful. The group holding the most number of shares in the company, around 47% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions, who own 29% shares weren’t spared from last week’s ₹27b market cap drop, private companies as a group suffered the maximum losses

Let's delve deeper into each type of owner of Glenmark Pharmaceuticals, beginning with the chart below.

View our latest analysis for Glenmark Pharmaceuticals

What Does The Institutional Ownership Tell Us About Glenmark Pharmaceuticals?

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.

Glenmark Pharmaceuticals already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Glenmark Pharmaceuticals' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Glenmark Pharmaceuticals. Looking at our data, we can see that the largest shareholder is Saldanha Family Trust with 45% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 3.4% and 3.3%, of the shares outstanding, respectively.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.

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 Glenmark Pharmaceuticals

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Glenmark Pharmaceuticals Limited. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around ₹16b worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Glenmark Pharmaceuticals. 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 47%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Glenmark Pharmaceuticals better, we need to consider many other factors.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.