Public companies account for 55% of Tata Technologies Limited's (NSE:TATATECH) ownership, while individual investors account for 25%

Key Insights

• The considerable ownership by public companies in Tata Technologies indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is Tata Motors Limited with a 55% stake
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

Every investor in Tata Technologies Limited (NSE:TATATECH) should be aware of the most powerful shareholder groups. We can see that public companies own the lion's share in the company with 55% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Individual investors, on the other hand, account for 25% of the company's stockholders.

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

View our latest analysis for Tata Technologies

What Does The Institutional Ownership Tell Us About Tata Technologies?

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.

As you can see, institutional investors have a fair amount of stake in Tata Technologies. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Tata Technologies' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Tata Technologies. Looking at our data, we can see that the largest shareholder is Tata Motors Limited with 55% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. TPG Capital, L.P. is the second largest shareholder owning 9.0% of common stock, and Alpha TC Holdings Pte. Ltd. holds about 4.9% of the company stock.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Tata Technologies

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Tata Technologies Limited. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around ₹5.0b worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 25% stake in Tata Technologies. 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 Equity Ownership

Private equity firms hold a 9.0% stake in Tata Technologies. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Public Company Ownership

It appears to us that public companies own 55% of Tata Technologies. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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 instance, we've identified 2 warning signs for Tata Technologies (1 can't be ignored) that you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.