Top Key Executive Rajesh Patil, Kolte-Patil Developers Limited's (NSE:KOLTEPATIL) largest shareholder sees value of holdings go down 10% after recent drop

Key Insights

• Insiders appear to have a vested interest in Kolte-Patil Developers' growth, as seen by their sizeable ownership
• A total of 3 investors have a majority stake in the company with 52% ownership
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

Every investor in Kolte-Patil Developers Limited (NSE:KOLTEPATIL) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 69% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, insiders endured the biggest losses as the stock fell by 10%.

Let's delve deeper into each type of owner of Kolte-Patil Developers, beginning with the chart below.

See our latest analysis for Kolte-Patil Developers

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

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.

Kolte-Patil Developers already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Kolte-Patil Developers' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Kolte-Patil Developers. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Kolte-Patil Developers' case, its Top Key Executive, Rajesh Patil, is the largest shareholder, holding 28% of shares outstanding. Naresh Patil is the second largest shareholder owning 15% of common stock, and Milind Kolte holds about 8.5% of the company stock. 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.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Kolte-Patil Developers

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 information suggests that insiders own more than half of Kolte-Patil Developers Limited. This gives them effective control of the company. Given it has a market cap of ₹24b, that means they have ₹17b worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Kolte-Patil Developers better, we need to consider many other factors. For instance, we've identified 2 warning signs for Kolte-Patil Developers (1 makes us a bit uncomfortable) that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.