Mastek Limited's (NSE:MASTEK) most bullish insider is Top Key Executive Ashank Desai, and their holdings value went up by 8.5% last week

Key Insights

• Insiders appear to have a vested interest in Mastek's growth, as seen by their sizeable ownership
• A total of 8 investors have a majority stake in the company with 51% ownership
• Institutional ownership in Mastek is 14%

Our free stock report includes 2 warning signs investors should be aware of before investing in Mastek. Read for free now.

Every investor in Mastek Limited (NSE:MASTEK) should be aware of the most powerful shareholder groups. With 57% stake, individual insiders possess the maximum shares in the company. 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 ₹70b market cap following a 8.5% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Mastek.

See our latest analysis for Mastek

What Does The Institutional Ownership Tell Us About Mastek?

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.

We can see that Mastek does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Mastek, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Mastek. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Mastek's case, its Top Key Executive, Ashank Desai, is the largest shareholder, holding 11% of shares outstanding. With 8.9% and 7.2% of the shares outstanding respectively, Girija Sudhakar Ram and Ketan Mehta are the second and third largest shareholders. Interestingly, the third-largest shareholder, Ketan Mehta is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders. Furthermore, CEO Umang Nahata is the owner of 5.5% of the company's shares.

We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Mastek

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 information suggests that insiders own more than half of Mastek Limited. This gives them effective control of the company. Given it has a market cap of ₹70b, that means they have ₹40b worth of shares. 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

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Mastek. 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.

Private Company Ownership

We can see that Private Companies own 3.2%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Mastek better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Mastek you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.