Could The Intellect Design Arena Limited (NSE:INTELLECT) Ownership Structure Tell Us Something Useful?

By
Simply Wall St
Published
February 23, 2022
NSEI:INTELLECT
Source: Shutterstock

If you want to know who really controls Intellect Design Arena Limited (NSE:INTELLECT), then you'll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

With a market capitalization of ₹87b, Intellect Design Arena is a decent size, so it is probably on the radar of institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about Intellect Design Arena.

Check out our latest analysis for Intellect Design Arena

ownership-breakdown
NSEI:INTELLECT Ownership Breakdown February 23rd 2022

What Does The Institutional Ownership Tell Us About Intellect Design Arena?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Intellect Design Arena. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Intellect Design Arena's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NSEI:INTELLECT Earnings and Revenue Growth February 23rd 2022

It would appear that 7.2% of Intellect Design Arena shares are controlled by hedge funds. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. With a 7.3% stake, CEO Arun Jain is the largest shareholder. Amansa Capital Pte. Ltd. is the second largest shareholder owning 7.2% of common stock, and White Oak Capital Management, Inc. holds about 5.0% of the company stock.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Intellect Design Arena

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own a reasonable proportion of Intellect Design Arena Limited. It has a market capitalization of just ₹87b, and insiders have ₹13b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 57% of Intellect Design Arena shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

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 Intellect Design Arena that you should be aware of before investing here.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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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