Brookfield India Real Estate Trust's (NSE:BIRET) stock price dropped 4.8% last week; private companies would not be happy

Key Insights

• The considerable ownership by private companies in Brookfield India Real Estate Trust indicates that they collectively have a greater say in management and business strategy
• The top 5 shareholders own 54% of the company
• Institutional ownership in Brookfield India Real Estate Trust is 13%

To get a sense of who is truly in control of Brookfield India Real Estate Trust (NSE:BIRET), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private companies with 49% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As market cap fell to ₹86b last week, private companies would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Brookfield India Real Estate Trust.

Check out our latest analysis for Brookfield India Real Estate Trust

What Does The Institutional Ownership Tell Us About Brookfield India Real Estate Trust?

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.

As you can see, institutional investors have a fair amount of stake in Brookfield India Real Estate Trust. 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. 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 Brookfield India Real Estate Trust's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Brookfield India Real Estate Trust. Our data shows that BSREP India Office Holdings V Pte. Ltd. is the largest shareholder with 16% of shares outstanding. For context, the second largest shareholder holds about 12% of the shares outstanding, followed by an ownership of 11% by the third-largest shareholder.

Our research also brought to light the fact that roughly 54% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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 Brookfield India Real Estate Trust

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

We note our data does not show any board members holding shares, personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.

General Public Ownership

The general public, who are usually individual investors, hold a 38% stake in Brookfield India Real Estate Trust. 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 49%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Brookfield India Real Estate Trust better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Brookfield India Real Estate Trust you should be aware of, and 1 of them is a bit unpleasant.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.