In spite of recent selling, insiders at Vimta Labs Limited (NSE:VIMTALABS) are the largest shareholders; own 34% shares

Key Insights

• Significant insider control over Vimta Labs implies vested interests in company growth
• 56% of the business is held by the top 5 shareholders
• Insiders have been selling lately

To get a sense of who is truly in control of Vimta Labs Limited (NSE:VIMTALABS), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 34% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Even though insiders have sold shares recently, the group owns the most numbers of shares in the company and as a result benefitted the most after market cap rose ₹3.4b last week.

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

Check out our latest analysis for Vimta Labs

What Does The Institutional Ownership Tell Us About Vimta Labs?

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.

Vimta Labs already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Vimta Labs' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Vimta Labs. Looking at our data, we can see that the largest shareholder is Eurofins Scientific SE with 20% of shares outstanding. With 12% and 9.4% of the shares outstanding respectively, Sivalinga Vasireddi and LCGC Chromatography Solutions Pvt Ltd are the second and third largest shareholders. Sivalinga Vasireddi, who is the second-largest shareholder, also happens to hold the title of Top Key Executive. Additionally, the company's CEO Harita Vasireddi directly holds 0.8% of the total shares outstanding.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Vimta Labs

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 most recent data indicates that insiders own a reasonable proportion of Vimta Labs Limited. It has a market capitalization of just ₹20b, and insiders have ₹6.8b worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 28% stake in the company, and hence can't easily be ignored. 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

We can see that Private Companies own 12%, of the shares on issue. 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.

Public Company Ownership

It appears to us that public companies own 20% of Vimta Labs. 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. For example, we've discovered 2 warning signs for Vimta Labs (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.