Both public companies who control a good portion of Sanofi India Limited (NSE:SANOFI) along with institutions must be dismayed after last week's 5.1% decrease

Key Insights

• The considerable ownership by public companies in Sanofi India indicates that they collectively have a greater say in management and business strategy
• 60% of the company is held by a single shareholder (Sanofi)
• Institutional ownership in Sanofi India is 26%

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A look at the shareholders of Sanofi India Limited (NSE:SANOFI) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are public companies with 60% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 5.1% decrease in the stock price last week, public companies suffered the most losses, but institutions who own 26% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of Sanofi India.

See our latest analysis for Sanofi India

What Does The Institutional Ownership Tell Us About Sanofi India?

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.

As you can see, institutional investors have a fair amount of stake in Sanofi India. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Sanofi India's historic earnings and revenue below, but keep in mind there's always more to the story.

Sanofi India is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Sanofi with 60% of shares outstanding. This implies that they have majority interest control of the future of the company. Life Insurance Corporation of India, Asset Management Arm is the second largest shareholder owning 5.9% of common stock, and Nippon Life India Asset Management Limited holds about 3.9% of the company stock.

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. 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 Sanofi India

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.

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 data cannot confirm that board members are holding shares personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

With a 13% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sanofi India. 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.

Public Company Ownership

Public companies currently own 60% of Sanofi India stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Sanofi India , and understanding them should be part of your investment process.

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.