Private companies who have a significant stake must be disappointed along with institutions after Shriram Properties Limited's (NSE:SHRIRAMPPS) market cap dropped by ₹2.3b

Key Insights

• The considerable ownership by private companies in Shriram Properties indicates that they collectively have a greater say in management and business strategy
• 55% of the business is held by the top 3 shareholders
• Institutions own 26% of Shriram Properties

If you want to know who really controls Shriram Properties Limited (NSE:SHRIRAMPPS), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 48% to be precise, is private companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 10% decrease in the stock price last week, private companies suffered the most losses, but institutions who own 26% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of Shriram Properties.

View our latest analysis for Shriram Properties

What Does The Institutional Ownership Tell Us About Shriram Properties?

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.

We can see that Shriram Properties does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Shriram Properties' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Shriram Properties. Shriram Properties Holdings Private Limited is currently the company's largest shareholder with 28% of shares outstanding. In comparison, the second and third largest shareholders hold about 14% and 13% of the stock.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 55% stake.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Shriram Properties

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.

Shareholders would probably be interested to learn that insiders own shares in Shriram Properties Limited. As individuals, the insiders collectively own ₹489m worth of the ₹20b company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 23% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shriram Properties. 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

It seems that Private Companies own 48%, of the Shriram Properties stock. 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.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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.