Innovana Thinklabs Limited's (NSE:INNOVANA) most bullish insider, CEO Chandan Garg must be pleased with the recent 21% gain

Key Insights

• Insiders appear to have a vested interest in Innovana Thinklabs' growth, as seen by their sizeable ownership
• The largest shareholder of the company is Chandan Garg with a 71% stake
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Innovana Thinklabs Limited (NSE:INNOVANA) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 73% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit ₹11b market cap following a 21% gain in the stock.

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

See our latest analysis for Innovana Thinklabs

What Does The Lack Of Institutional Ownership Tell Us About Innovana Thinklabs?

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. Innovana Thinklabs' earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Innovana Thinklabs is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Chandan Garg with 71% of shares outstanding. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. For context, the second largest shareholder holds about 2.0% of the shares outstanding, followed by an ownership of 0.002% by the third-largest shareholder. Interestingly, the second and third-largest shareholders also happen to be the Senior Key Executive and Member of the Board of Directors, respectively. This once again signifies considerable insider ownership amongst the company's top shareholders.

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 Innovana Thinklabs

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our most recent data indicates that insiders own the majority of Innovana Thinklabs Limited. This means they can collectively make decisions for the company. That means they own ₹7.8b worth of shares in the ₹11b 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-- including retail investors -- own 27% stake in the company, and hence can't easily be ignored. 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.

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 2 warning signs with Innovana Thinklabs , and understanding them should be part of your investment process.

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.