Dynacons Systems & Solutions Limited (NSE:DSSL) adds ₹1.6b in market cap and insiders have a 52% stake in that gain

Key Insights

• Significant insider control over Dynacons Systems & Solutions implies vested interests in company growth
• A total of 4 investors have a majority stake in the company with 52% ownership
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Dynacons Systems & Solutions Limited (NSE:DSSL) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 52% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit ₹17b market cap following a 10% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Dynacons Systems & Solutions.

See our latest analysis for Dynacons Systems & Solutions

What Does The Lack Of Institutional Ownership Tell Us About Dynacons Systems & Solutions?

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 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. 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 Dynacons Systems & Solutions, for yourself, below.

Hedge funds don't have many shares in Dynacons Systems & Solutions. Trigem InfoSolutions Ltd. is currently the company's largest shareholder with 16% of shares outstanding. The second and third largest shareholders are Parag Dalal and Shirish Anjaria, with an equal amount of shares to their name at 13%. Interestingly, the bottom two of the top three shareholders also hold the title of Senior Key Executive and Chairman of the Board, respectively, suggesting that these insiders have a personal stake in the company.

Our research also brought to light the fact that roughly 52% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Dynacons Systems & Solutions

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 Dynacons Systems & Solutions Limited. This gives them effective control of the company. So they have a ₹8.8b stake in this ₹17b 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 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Dynacons Systems & Solutions. 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 16%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 1 warning sign for Dynacons Systems & Solutions that you should be aware of before investing here.

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.