Sirca Paints India Limited's (NSE:SIRCA) largest shareholder, CEO Sanjay Agarwal sees holdings value fall by 12% following recent drop

By
Simply Wall St
Published
May 13, 2022
NSEI:SIRCA
Source: Shutterstock

If you want to know who really controls Sirca Paints India Limited (NSE:SIRCA), then you'll have to look at the makeup of its share registry. With 49% 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 as a group endured the highest losses after market cap fell by ₹1.6b.

In the chart below, we zoom in on the different ownership groups of Sirca Paints India.

Check out our latest analysis for Sirca Paints India

ownership-breakdown
NSEI:SIRCA Ownership Breakdown May 13th 2022

What Does The Institutional Ownership Tell Us About Sirca Paints India?

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.

Since institutions own only a small portion of Sirca Paints India, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

earnings-and-revenue-growth
NSEI:SIRCA Earnings and Revenue Growth May 13th 2022

Sirca Paints India is not owned by hedge funds. With a 32% stake, CEO Sanjay Agarwal is the largest shareholder. Meanwhile, the second and third largest shareholders, hold 19% and 14%, of the shares outstanding, respectively. Interestingly, the third-largest shareholder, Gurjit Bains is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 51% stake.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Sirca Paints India

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders maintain a significant holding in Sirca Paints India Limited. Insiders own ₹5.6b worth of shares in the ₹12b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 24% stake in Sirca Paints India. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 23%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Sirca Paints India , and understanding them should be part of your investment process.

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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