Can We See Significant Institutional Ownership On The Sterlite Technologies Limited (NSE:STRTECH) Share Register?

Every investor in Sterlite Technologies Limited (NSE:STRTECH) should be aware of the most powerful shareholder groups. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. We also tend to see lower insider ownership in companies that were previously publicly owned.

With a market capitalization of ₹30b, Sterlite Technologies is a small cap stock, so it might not be well known by many institutional investors. Taking a look at our data on the ownership groups (below), it's seems that institutions own shares in the company. Let's take a closer look to see what the different types of shareholder can tell us about Sterlite Technologies.

View our latest analysis for Sterlite Technologies

What Does The Institutional Ownership Tell Us About Sterlite Technologies?

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.

We can see that Sterlite Technologies does have institutional investors; and they hold 13% of the stock. 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. 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 Sterlite Technologies's earnings history, below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Sterlite Technologies. The company's largest shareholder is Twin Star Overseas Ltd, with ownership of 52%, This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With 3.0% and 2.2% of the shares outstanding respectively, L&T Investment Management Limited and DSP Investment Managers Pvt. Ltd. are the second and third largest shareholders.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Sterlite Technologies

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. 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.

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.

Shareholders would probably be interested to learn that insiders own shares in Sterlite Technologies Limited. In their own names, insiders own ₹846m worth of stock in the ₹30b company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 30% ownership, the general public have some degree of sway over STRTECH. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 53%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Sterlite Technologies better, we need to consider many other factors. To that end, you should be aware of the 3 warning signs we've spotted with Sterlite Technologies .

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.