Insiders were the key beneficiaries as D. P. Abhushan Limited's (NSE:DPABHUSHAN) market cap rises to ₹35b

Key Insights

• D. P. Abhushan's significant insider ownership suggests inherent interests in company's expansion
• The top 2 shareholders own 57% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

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A look at the shareholders of D. P. Abhushan Limited (NSE:DPABHUSHAN) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 78% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, insiders benefitted the most after the company's market cap rose by ₹5.1b last week.

In the chart below, we zoom in on the different ownership groups of D. P. Abhushan.

See our latest analysis for D. P. Abhushan

What Does The Institutional Ownership Tell Us About D. P. Abhushan?

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.

Institutions have a very small stake in D. P. Abhushan. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Hedge funds don't have many shares in D. P. Abhushan. Our data shows that Ratanlal Kataria is the largest shareholder with 30% of shares outstanding. For context, the second largest shareholder holds about 27% of the shares outstanding, followed by an ownership of 8.8% by the third-largest shareholder. Two of the top three shareholders happen to be Senior Key Executive and Member of the Board of Directors, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders. In addition, we found that Santosh Kataria, the CEO has 4.8% of the shares allocated to their name.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of D. P. Abhushan

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.

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.

Our information suggests that insiders own more than half of D. P. Abhushan Limited. This gives them effective control of the company. That means they own ₹27b worth of shares in the ₹35b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to discover (for free) if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 19% stake in the company, and hence can't easily be ignored. 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.

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. Case in point: We've spotted 1 warning sign for D. P. Abhushan you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.