The recent 13% gain must have brightened Top Key Executive Rajesh Patil's week, Kolte-Patil Developers Limited's (NSE:KOLTEPATIL) most bullish insider

Key Insights

• Kolte-Patil Developers' significant insider ownership suggests inherent interests in company's expansion
• 52% of the business is held by the top 3 shareholders
• Institutions own 12% of Kolte-Patil Developers

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To get a sense of who is truly in control of Kolte-Patil Developers Limited (NSE:KOLTEPATIL), 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 69% 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 were the biggest beneficiaries of last week’s 13% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Kolte-Patil Developers.

View our latest analysis for Kolte-Patil Developers

What Does The Institutional Ownership Tell Us About Kolte-Patil Developers?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Kolte-Patil Developers. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Kolte-Patil Developers, (below). Of course, keep in mind that there are other factors to consider, too.

Kolte-Patil Developers is not owned by hedge funds. From our data, we infer that the largest shareholder is Rajesh Patil (who also holds the title of Top Key Executive) with 28% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. With 15% and 8.5% of the shares outstanding respectively, Naresh Patil and Milind Kolte are the second and third largest shareholders. Note that two of the top three shareholders are also Senior Key Executive and Member of the Board of Directors, respectively, once again pointing to significant ownership by company insiders.

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 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Kolte-Patil Developers

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 Kolte-Patil Developers Limited stock. This gives them a lot of power. So they have a ₹20b stake in this ₹28b business. 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 19% stake in Kolte-Patil Developers. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 4 warning signs for Kolte-Patil Developers (1 is a bit concerning!) that you should be aware of before investing here.

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.