Individual investors who hold 38% of Neuland Laboratories Limited (NSE:NEULANDLAB) gained 4.2%, insiders profited as well

Key Insights

• Significant control over Neuland Laboratories by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 9 shareholders own 51% of the company
• 37% of Neuland Laboratories is held by insiders

A look at the shareholders of Neuland Laboratories Limited (NSE:NEULANDLAB) can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 38% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 4.2% increase in the stock price last week, individual investors profited the most, but insiders who own 37% stock also stood to gain from the increase.

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

See our latest analysis for Neuland Laboratories

What Does The Institutional Ownership Tell Us About Neuland Laboratories?

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 Neuland Laboratories. 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. 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 Neuland Laboratories' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Neuland Laboratories. From our data, we infer that the largest shareholder is Davuluri Rama Rao (who also holds the title of Top Key Executive) with 26% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. In comparison, the second and third largest shareholders hold about 7.2% and 3.3% of the stock. Interestingly, the third-largest shareholder, Davuluri Rao is also a Vice Chairman, again, indicating strong insider ownership amongst the company's top shareholders.

We also observed that the top 9 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.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Neuland Laboratories

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own a reasonable proportion of Neuland Laboratories Limited. It has a market capitalization of just ₹151b, and insiders have ₹57b worth of shares in their own names. That's quite significant. 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

With a 38% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Neuland Laboratories. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 7.2% stake in Neuland Laboratories. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Neuland Laboratories 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.