After the recent decline, Zen Technologies Limited (NSE:ZENTEC) CEO Ashok Atluri's holdings have lost 7.4% of their value

Key Insights

• Insiders appear to have a vested interest in Zen Technologies' growth, as seen by their sizeable ownership
• The top 6 shareholders own 52% of the company
• Institutional ownership in Zen Technologies is 14%

To get a sense of who is truly in control of Zen Technologies Limited (NSE:ZENTEC), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 50% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, insiders endured the biggest losses as the stock fell by 7.4%.

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

View our latest analysis for Zen Technologies

What Does The Institutional Ownership Tell Us About Zen 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.

Zen Technologies already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Zen Technologies' 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 Zen Technologies. Looking at our data, we can see that the largest shareholder is the CEO Ashok Atluri with 23% of shares outstanding. With 17% and 3.5% of the shares outstanding respectively, Kishore Atluri and Motilal Oswal Asset Management Company Limited are the second and third largest shareholders. Interestingly, the second-largest shareholder, Kishore Atluri is also Co-Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Zen Technologies

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

Our most recent data indicates that insiders own the majority of Zen Technologies Limited. This means they can collectively make decisions for the company. Given it has a market cap of ₹150b, that means insiders have a whopping ₹75b 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 34% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Zen Technologies. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Zen Technologies better, we need to consider many other factors. Be aware that Zen Technologies is showing 2 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.