Following recent decline, NGL Fine-Chem Limited's (NSE:NGLFINE) top shareholder Chief Financial Officer Rajesh Lawande sees holdings value drop by 11%

Key Insights

• NGL Fine-Chem's significant insider ownership suggests inherent interests in company's expansion
• The top 3 shareholders own 53% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

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To get a sense of who is truly in control of NGL Fine-Chem Limited (NSE:NGLFINE), it is important to understand the ownership structure of the business. With 66% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to ₹8.9b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of NGL Fine-Chem, beginning with the chart below.

See our latest analysis for NGL Fine-Chem

What Does The Lack Of Institutional Ownership Tell Us About NGL Fine-Chem?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of NGL Fine-Chem, for yourself, below.

NGL Fine-Chem is not owned by hedge funds. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In NGL Fine-Chem's case, its Chief Financial Officer, Rajesh Lawande, is the largest shareholder, holding 22% of shares outstanding. With 18% and 13% of the shares outstanding respectively, Rahul Nachane and Sunita Potdar are the second and third largest shareholders. Interestingly, the second-largest shareholder, Rahul Nachane is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of NGL Fine-Chem

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.

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 information suggests that insiders own more than half of NGL Fine-Chem Limited. This gives them effective control of the company. So they have a ₹5.9b stake in this ₹8.9b business. Most would argue this is a positive, showing strong alignment with shareholders. 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 26% stake in NGL Fine-Chem. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 8.4%, of the shares on issue. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for NGL Fine-Chem (of which 1 is potentially serious!) you should know about.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.