Trident Techlabs Limited's (NSE:TECHLABS): Senior Key Executive Praveen Kapoor is the most bullish insider, and their stock value gained 28% last week

Key Insights

• Significant insider control over Trident Techlabs implies vested interests in company growth
• A total of 2 investors have a majority stake in the company with 68% ownership
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

If you want to know who really controls Trident Techlabs Limited (NSE:TECHLABS), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 72% ownership. 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 ₹10b market cap following a 28% gain in the stock.

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

View our latest analysis for Trident Techlabs

What Does The Lack Of Institutional Ownership Tell Us About Trident Techlabs?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Trident Techlabs' earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

We note that hedge funds don't have a meaningful investment in Trident Techlabs. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Trident Techlabs' case, its Senior Key Executive, Praveen Kapoor, is the largest shareholder, holding 34% of shares outstanding. For context, the second largest shareholder holds about 34% of the shares outstanding, followed by an ownership of 0.9% by the third-largest shareholder. Interestingly, the second-largest shareholder, Sukesh Naithani is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Trident Techlabs

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.

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.

Our information suggests that insiders own more than half of Trident Techlabs Limited. This gives them effective control of the company. Given it has a market cap of ₹10b, that means they have ₹7.3b worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 27% stake in Trident Techlabs. 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.

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 Trident Techlabs (1 is a bit concerning) that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com