Laxmi Goldorna House Limited's (NSE:LGHL) most bullish insider is Senior Key Executive Rupalben Shah, and their holdings value went up by 15% last week

Key Insights

• Significant insider control over Laxmi Goldorna House implies vested interests in company growth
• 67% of the business is held by the top 2 shareholders
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

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If you want to know who really controls Laxmi Goldorna House Limited (NSE:LGHL), then you'll have to look at the makeup of its share registry. With 73% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by ₹2.3b last week.

In the chart below, we zoom in on the different ownership groups of Laxmi Goldorna House.

Check out our latest analysis for Laxmi Goldorna House

What Does The Lack Of Institutional Ownership Tell Us About Laxmi Goldorna House?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Laxmi Goldorna House, for yourself, below.

Laxmi Goldorna House is not owned by hedge funds. Our data suggests that Rupalben Shah, who is also the company's Senior Key Executive, holds the most number of shares at 35%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. With 32% and 3.0% of the shares outstanding respectively, Jayesh Shah and Jinit Shah are the second and third largest shareholders. Interestingly, the second-largest shareholder, Jayesh Shah is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 2 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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Laxmi Goldorna House

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders own more than half of Laxmi Goldorna House Limited. This gives them effective control of the company. So they have a ₹12b stake in this ₹17b 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

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Laxmi Goldorna House. 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 Laxmi Goldorna House better, we need to consider many other factors. For instance, we've identified 2 warning signs for Laxmi Goldorna House that you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.