Prestige Estates Projects Limited (NSE:PRESTIGE) surges 6.6%; private companies who own 55% shares profited along with institutions

Key Insights

• Significant control over Prestige Estates Projects by private companies implies that the general public has more power to influence management and governance-related decisions
• The largest shareholder of the company is Razack Family Trust with a 52% stake
• Institutional ownership in Prestige Estates Projects is 25%

Every investor in Prestige Estates Projects Limited (NSE:PRESTIGE) should be aware of the most powerful shareholder groups. With 55% stake, private companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Private companies gained the most after market cap touched ₹711b last week, while institutions who own 25% also benefitted.

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

View our latest analysis for Prestige Estates Projects

What Does The Institutional Ownership Tell Us About Prestige Estates Projects?

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 Prestige Estates Projects. 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 Prestige Estates Projects' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Prestige Estates Projects. Looking at our data, we can see that the largest shareholder is Razack Family Trust with 52% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. For context, the second largest shareholder holds about 2.8% of the shares outstanding, followed by an ownership of 2.8% by the third-largest shareholder. Additionally, the company's CEO Irfan Razack directly holds 2.2% of the total shares outstanding.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Prestige Estates Projects

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. 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.

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.

We can report that insiders do own shares in Prestige Estates Projects Limited. The insiders have a meaningful stake worth ₹62b. Most would say this shows a good alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

With a 11% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Prestige Estates Projects. 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

Our data indicates that Private Companies hold 55%, of the company's shares. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 3 warning signs we've spotted with Prestige Estates Projects .

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.