Public companies are Ramco Systems Limited's (NSE:RAMCOSYS) biggest owners and were rewarded after market cap rose by ₹2.8b last week

Key Insights

• The considerable ownership by public companies in Ramco Systems indicates that they collectively have a greater say in management and business strategy
• A total of 4 investors have a majority stake in the company with 54% ownership
• 19% of Ramco Systems is held by insiders

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Every investor in Ramco Systems Limited (NSE:RAMCOSYS) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 36% to be precise, is public companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, public companies benefitted the most after the company's market cap rose by ₹2.8b last week.

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

View our latest analysis for Ramco Systems

What Does The Institutional Ownership Tell Us About Ramco Systems?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Ramco Systems already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Ramco Systems, (below). Of course, keep in mind that there are other factors to consider, too.

It would appear that 7.3% of Ramco Systems shares are controlled by hedge funds. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Our data shows that Ramco Industries Limited is the largest shareholder with 19% of shares outstanding. In comparison, the second and third largest shareholders hold about 15% and 13% of the stock. Poosapadi Ramasubrahmaneya Venketrama Raja, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board. Furthermore, CEO Poosapadi Venketrama Raja Ramasubramaniam Raja is the owner of 0.6% of the company's shares.

On looking further, we found that 54% 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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Ramco Systems

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 information suggests that insiders maintain a significant holding in Ramco Systems Limited. It has a market capitalization of just ₹20b, and insiders have ₹3.7b worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 26% 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.

Public Company Ownership

We can see that public companies hold 36% of the Ramco Systems shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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. To that end, you should be aware of the 1 warning sign we've spotted with Ramco Systems .

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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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.