Insiders still own 70% of Panacea Biotec Limited (NSE:PANACEABIO) despite recent sales

Key Insights

• Panacea Biotec's significant insider ownership suggests inherent interests in company's expansion
• A total of 2 investors have a majority stake in the company with 66% ownership
• Insiders have sold recently

To get a sense of who is truly in control of Panacea Biotec Limited (NSE:PANACEABIO), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 70% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Insiders are at the top of the company's shareholdings despite selling some shares recently. As a result, they were also the biggest winners as market cap hit ₹9.9b last week.

In the chart below, we zoom in on the different ownership groups of Panacea Biotec.

View our latest analysis for Panacea Biotec

What Does The Lack Of Institutional Ownership Tell Us About Panacea Biotec?

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. Alternatively, there might be something about the company that has kept institutional investors away. Panacea Biotec might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Hedge funds don't have many shares in Panacea Biotec. Looking at our data, we can see that the largest shareholder is the CEO Rajesh Jain with 49% of shares outstanding. Sandeep Jain is the second largest shareholder owning 16% of common stock, and Nirmala Jain holds about 4.1% of the company stock. Interestingly, the second-largest shareholder, Sandeep Jain is also Co-Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Panacea Biotec

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.

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.

It seems that insiders own more than half the Panacea Biotec Limited stock. This gives them a lot of power. That means they own ₹6.9b worth of shares in the ₹9.9b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 25% stake in Panacea Biotec. 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 4.9%, of the Panacea Biotec stock. 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 Panacea Biotec better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Panacea Biotec you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.