Netweb Technologies India Limited's (NSE:NETWEB) most bullish insider, CEO Sanjay Lodha must be pleased with the recent 5.0% gain

Key Insights

• Significant insider control over Netweb Technologies India implies vested interests in company growth
• 57% of the business is held by the top 3 shareholders
• Institutions own 15% of Netweb Technologies India

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Every investor in Netweb Technologies India Limited (NSE:NETWEB) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 71% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 5.0% gain.

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

See our latest analysis for Netweb Technologies India

What Does The Institutional Ownership Tell Us About Netweb Technologies India?

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.

As you can see, institutional investors have a fair amount of stake in Netweb Technologies India. 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. 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 Netweb Technologies India's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Netweb Technologies India. Looking at our data, we can see that the largest shareholder is the CEO Sanjay Lodha with 28% of shares outstanding. The second and third largest shareholders are Niraj Lodha and Navin Lodha, with an equal amount of shares to their name at 14%. Note that two of the top three shareholders are also Senior Key Executive and Member of the Board of Directors, respectively, once again pointing to significant ownership by company insiders.

After doing some more digging, we found that the top 3 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. 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 Netweb Technologies India

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 that insiders own more than half the Netweb Technologies India Limited stock. This gives them a lot of power. Given it has a market cap of ₹104b, that means insiders have a whopping ₹74b worth of shares in their own names. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

With a 13% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Netweb Technologies India. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Netweb Technologies India better, we need to consider many other factors. Take risks for example - Netweb Technologies India has 1 warning sign we think you should be aware of.

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.

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

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.