Insiders of Solex Energy Limited (NSE:SOLEX) have had a great week after last week's ₹2.2b gain and they haven't stopped buying

Key Insights

• Insiders appear to have a vested interest in Solex Energy's growth, as seen by their sizeable ownership
• The top 9 shareholders own 51% of the company
• Insiders have been buying lately

To get a sense of who is truly in control of Solex Energy Limited (NSE:SOLEX), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 64% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Having purchased shares recently, insiders must be glad after market cap hit ₹16b last week.

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

See our latest analysis for Solex Energy

What Does The Lack Of Institutional Ownership Tell Us About Solex Energy?

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

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Solex Energy, for yourself, below.

Solex Energy is not owned by hedge funds. From our data, we infer that the largest shareholder is Kalpeshkumar Patel (who also holds the title of Senior Key Executive) with 9.3% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. For context, the second largest shareholder holds about 8.0% of the shares outstanding, followed by an ownership of 7.5% by the third-largest shareholder. Furthermore, CEO Chetan Shah is the owner of 1.9% of the company's shares.

We did some more digging and found that 9 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 Solex Energy

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.

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 that insiders own more than half the Solex Energy Limited stock. This gives them a lot of power. That means they own ₹10b worth of shares in the ₹16b company. That's quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 36% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Solex Energy. 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. To that end, you should learn about the 3 warning signs we've spotted with Solex Energy (including 2 which are potentially serious) .

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.