Insiders the biggest winners as FSN E-Commerce Ventures Limited's (NSE:NYKAA) market cap rises to ₹572b

Key Insights

• Significant insider control over FSN E-Commerce Ventures implies vested interests in company growth
• A total of 3 investors have a majority stake in the company with 51% ownership
• Institutional ownership in FSN E-Commerce Ventures is 24%

Every investor in FSN E-Commerce Ventures Limited (NSE:NYKAA) should be aware of the most powerful shareholder groups. With 56% stake, individual insiders possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, insiders benefitted the most after the company's market cap rose by ₹49b last week.

Let's take a closer look to see what the different types of shareholders can tell us about FSN E-Commerce Ventures.

View our latest analysis for FSN E-Commerce Ventures

What Does The Institutional Ownership Tell Us About FSN E-Commerce Ventures?

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 FSN E-Commerce Ventures. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 FSN E-Commerce Ventures' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in FSN E-Commerce Ventures. Looking at our data, we can see that the largest shareholder is Sanjay Nayar with 22% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 22% and 6.4%, of the shares outstanding, respectively. Falguni Nayar, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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 51% 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of FSN E-Commerce Ventures

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 most recent data indicates that insiders own the majority of FSN E-Commerce Ventures Limited. This means they can collectively make decisions for the company. That means insiders have a very meaningful ₹317b stake in this ₹572b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

With a 12% ownership, the general public, mostly comprising of individual investors, have some degree of sway over FSN E-Commerce Ventures. 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 8.1%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.

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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.

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