Insiders of Australian Premium Solar (India) Limited (NSE:APS) were rewarded after last week’s 15% gain

Key Insights

• Australian Premium Solar (India)'s significant insider ownership suggests inherent interests in company's expansion
• 74% of the business is held by the top 2 shareholders
• Insiders have been buying lately

Our free stock report includes 1 warning sign investors should be aware of before investing in Australian Premium Solar (India). Read for free now.

If you want to know who really controls Australian Premium Solar (India) Limited (NSE:APS), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 74% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Having purchased shares recently, insiders must be glad after market cap hit ₹8.8b last week.

In the chart below, we zoom in on the different ownership groups of Australian Premium Solar (India).

Check out our latest analysis for Australian Premium Solar (India)

What Does The Lack Of Institutional Ownership Tell Us About Australian Premium Solar (India)?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Australian Premium Solar (India)'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.

We note that hedge funds don't have a meaningful investment in Australian Premium Solar (India). Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Australian Premium Solar (India)'s case, its Top Key Executive, Nikunjkumar Patel, is the largest shareholder, holding 38% of shares outstanding. Chimanbhai Patel is the second largest shareholder owning 36% of common stock, and Prashantkumar Patel holds about 0.5% of the company stock.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. 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 Australian Premium Solar (India)

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 Australian Premium Solar (India) Limited. This gives them effective control of the company. Given it has a market cap of ₹8.8b, that means they have ₹6.5b worth of shares. 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 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Australian Premium Solar (India). 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Australian Premium Solar (India) better, we need to consider many other factors. For example, we've discovered 1 warning sign for Australian Premium Solar (India) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.