Following recent decline, Radhika Jeweltech Limited's (NSE:RADHIKAJWE) top shareholder CEO Ashokkumar Zinzuwadia sees holdings value drop by 18%

Key Insights

• Significant insider control over Radhika Jeweltech implies vested interests in company growth
• A total of 2 investors have a majority stake in the company with 57% ownership
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of Radhika Jeweltech Limited (NSE:RADHIKAJWE) can tell us which group is most powerful. The group holding the most number of shares in the company, around 82% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 18% decline in share price, insiders suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Radhika Jeweltech.

Check out our latest analysis for Radhika Jeweltech

What Does The Lack Of Institutional Ownership Tell Us About Radhika Jeweltech?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Radhika Jeweltech's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Hedge funds don't have many shares in Radhika Jeweltech. With a 37% stake, CEO Ashokkumar Zinzuwadia is the largest shareholder. For context, the second largest shareholder holds about 19% of the shares outstanding, followed by an ownership of 10% by the third-largest shareholder. Interestingly, the second-largest shareholder, Hareshbhai Zinzuwadia is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

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.

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 Radhika Jeweltech

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 information suggests that insiders own more than half of Radhika Jeweltech Limited. This gives them effective control of the company. So they have a ₹11b stake in this ₹13b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 18% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Radhika Jeweltech. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Radhika Jeweltech , and understanding them should be part of your investment process.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.