Shilpa Medicare Limited's (NSE:SHILPAMED) CEO Vishnukanth Bhutada is the most upbeat insider, and their holdings increased by 26% last week

Key Insights

• Insiders appear to have a vested interest in Shilpa Medicare's growth, as seen by their sizeable ownership
• The top 13 shareholders own 50% of the company
• Institutional ownership in Shilpa Medicare is 15%

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Every investor in Shilpa Medicare Limited (NSE:SHILPAMED) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 55% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit ₹77b market cap following a 26% gain in the stock.

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

Check out our latest analysis for Shilpa Medicare

What Does The Institutional Ownership Tell Us About Shilpa Medicare?

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.

We can see that Shilpa Medicare does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Shilpa Medicare's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Shilpa Medicare. The company's CEO Vishnukanth Bhutada is the largest shareholder with 8.9% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.2% and 4.6%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 13 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Shilpa Medicare

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.

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.

Our most recent data indicates that insiders own the majority of Shilpa Medicare Limited. This means they can collectively make decisions for the company. That means they own ₹42b worth of shares in the ₹77b 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 23% stake in Shilpa Medicare. 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 6.0%, of the Shilpa Medicare 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:

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.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.