Private companies invested in Syrma SGS Technology Limited (NSE:SYRMA) copped the brunt of last week's ₹11b market cap decline

Key Insights

• Significant control over Syrma SGS Technology by private companies implies that the general public has more power to influence management and governance-related decisions
• A total of 4 investors have a majority stake in the company with 56% ownership
• Insider ownership in Syrma SGS Technology is 27%

A look at the shareholders of Syrma SGS Technology Limited (NSE:SYRMA) can tell us which group is most powerful. The group holding the most number of shares in the company, around 39% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 9.5% decrease in the stock price last week, private companies suffered the most losses, but insiders who own 27% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of Syrma SGS Technology.

Check out our latest analysis for Syrma SGS Technology

What Does The Institutional Ownership Tell Us About Syrma SGS Technology?

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.

Syrma SGS Technology already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Syrma SGS Technology's earnings history below. Of course, the future is what really matters.

Syrma SGS Technology is not owned by hedge funds. Our data shows that Tandon Technology Ventures is the largest shareholder with 36% of shares outstanding. With 7.0% and 6.9% of the shares outstanding respectively, Jasbir Gujral and Krishna Pant are the second and third largest shareholders. Jasbir Gujral, who is the second-largest shareholder, also happens to hold the title of Senior Key Executive.

On looking further, we found that 56% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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 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 Syrma SGS Technology

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.

Our information suggests that insiders maintain a significant holding in Syrma SGS Technology Limited. Insiders own ₹28b worth of shares in the ₹101b company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. 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 15% stake in Syrma SGS Technology. 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 39%, 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we've identified 3 warning signs for Syrma SGS Technology that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.