Godrej Properties Limited's (NSE:GODREJPROP) 3.8% loss last week hit both individual investors who own 47% as well as institutions

By
Simply Wall St
Published
April 15, 2022
NSEI:GODREJPROP
Source: Shutterstock

If you want to know who really controls Godrej Properties Limited (NSE:GODREJPROP), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are public companies with 47% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions who own 18% came under pressure after market cap dropped to ₹446b last week,public companies took the most losses.

Let's delve deeper into each type of owner of Godrej Properties, beginning with the chart below.

See our latest analysis for Godrej Properties

ownership-breakdown
NSEI:GODREJPROP Ownership Breakdown April 15th 2022

What Does The Institutional Ownership Tell Us About Godrej Properties?

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 Godrej Properties. 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 Godrej Properties' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NSEI:GODREJPROP Earnings and Revenue Growth April 15th 2022

Godrej Properties is not owned by hedge funds. Godrej Industries Limited is currently the company's largest shareholder with 47% of shares outstanding. For context, the second largest shareholder holds about 3.8% of the shares outstanding, followed by an ownership of 2.7% by the third-largest shareholder.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Godrej Properties

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.

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 data suggests that insiders own under 1% of Godrej Properties Limited in their own names. However, it's possible that insiders might have an indirect interest through a more complex structure. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own ₹4.3b worth of shares. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 14% stake in Godrej Properties. 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.

Private Company Ownership

We can see that Private Companies own 10%, of the shares on issue. 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.

Public Company Ownership

We can see that public companies hold 47% of the Godrej Properties shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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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