Stock Analysis

Despite recent sales, Tanla Platforms Limited (NSE:TANLA) insiders own 47% shares but recent downturn may have set them back

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Key Insights

  • Significant insider control over Tanla Platforms implies vested interests in company growth
  • A total of 5 investors have a majority stake in the company with 52% ownership
  • Insiders have been selling lately

Every investor in Tanla Platforms Limited (NSE:TANLA) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 47% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Despite selling some shares recently, insiders control a good portion of the company's stock. As a result, they were also the group to endure the biggest losses as the stock fell by 5.9%.

Let's delve deeper into each type of owner of Tanla Platforms, beginning with the chart below.

View our latest analysis for Tanla Platforms

NSEI:TANLA Ownership Breakdown March 15th 2023

What Does The Institutional Ownership Tell Us About Tanla Platforms?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Tanla Platforms. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Tanla Platforms' historic earnings and revenue below, but keep in mind there's always more to the story.

NSEI:TANLA Earnings and Revenue Growth March 15th 2023

Tanla Platforms is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Dasari Uday Reddy with 37% of shares outstanding. In comparison, the second and third largest shareholders hold about 7.8% and 2.6% of the stock. Interestingly, the third-largest shareholder, Deepak Goyal is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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 Tanla Platforms

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

It seems insiders own a significant proportion of Tanla Platforms Limited. It is very interesting to see that insiders have a meaningful ₹39b stake in this ₹83b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Tanla Platforms. 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

Our data indicates that Private Companies hold 6.5%, of the company's shares. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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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