Private companies who hold 55% of Prestige Estates Projects Limited (NSE:PRESTIGE) gained 5.2%, institutions profited as well

Key Insights

• The considerable ownership by private companies in Prestige Estates Projects indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is Razack Family Trust with a 52% stake
• Institutions own 25% of Prestige Estates Projects

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Every investor in Prestige Estates Projects Limited (NSE:PRESTIGE) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private companies with 55% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While private companies were the group that benefitted the most from last week’s ₹36b market cap gain, institutions too had a 25% share in those profits.

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

Check out our latest analysis for Prestige Estates Projects

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

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.

Prestige Estates Projects already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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. Our data shows that Razack Family Trust is the largest shareholder with 52% of shares outstanding. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 2.7% of the shares outstanding, followed by an ownership of 2.2% by the third-largest shareholder. Rezwan Razack, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Furthermore, CEO Irfan Razack is the owner of 2.2% of the company's shares.

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 Prestige Estates Projects

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.

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 most recent data indicates that insiders own some shares in Prestige Estates Projects Limited. The insiders have a meaningful stake worth ₹64b. 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 11% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Prestige Estates Projects. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 55%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Prestige Estates Projects you should be aware of, and 1 of them makes us a bit uncomfortable.

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.