The recent ₹1.8b market cap decrease is likely to have disappointed insiders invested in Dynacons Systems & Solutions Limited (NSE:DSSL)

Key Insights

• Dynacons Systems & Solutions' significant insider ownership suggests inherent interests in company's expansion
• 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

To get a sense of who is truly in control of Dynacons Systems & Solutions Limited (NSE:DSSL), 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 50% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to ₹16b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

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

View our latest analysis for Dynacons Systems & Solutions

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

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

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. Dynacons Systems & Solutions might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Dynacons Systems & Solutions is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Trigem InfoSolutions Ltd. 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%. Note that the second and third-largest shareholders are also Senior Key Executive and Chairman of the Board, respectively, meaning that the company's top shareholders are insiders.

On looking further, we found that 52% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

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. 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.

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. That means they own ₹7.8b worth of shares in the ₹16b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 33% stake in Dynacons Systems & Solutions. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 17%, 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:

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.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

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.