Shankara Building Products Limited's (NSE:SHANKARA) most bullish insider is CEO Sukumar Srinivas, and their holdings value went up by 10% last week

Key Insights

• Significant insider control over Shankara Building Products implies vested interests in company growth
• The top 6 shareholders own 51% of the company
• Institutions own 14% of Shankara Building Products

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If you want to know who really controls Shankara Building Products Limited (NSE:SHANKARA), then you'll have to look at the makeup of its share registry. With 44% 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).

As a result, insiders scored the highest last week as the company hit ₹27b market cap following a 10% gain in the stock.

Let's delve deeper into each type of owner of Shankara Building Products, beginning with the chart below.

Check out our latest analysis for Shankara Building Products

What Does The Institutional Ownership Tell Us About Shankara Building Products?

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.

We can see that Shankara Building Products does have institutional investors; and they hold a good portion of the company's stock. 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 Shankara Building Products' historic earnings and revenue below, but keep in mind there's always more to the story.

Shankara Building Products is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Sukumar Srinivas with 39% of shares outstanding. With 4.4% and 2.5% of the shares outstanding respectively, Franklin Resources, Inc. and Flowering Tree Investment Management Pte. Ltd. are the second and third largest shareholders.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 Shankara Building Products

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. 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.

It seems insiders own a significant proportion of Shankara Building Products Limited. It has a market capitalization of just ₹27b, and insiders have ₹12b worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 41% 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. Take risks for example - Shankara Building Products has 1 warning sign we think you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.