Institutions profited after GTL Infrastructure Limited's (NSE:GTLINFRA) market cap rose ₹4.9b last week but retail investors profited the most

Key Insights

• Significant control over GTL Infrastructure by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 21 investors have a majority stake in the company with 42% ownership
• 37% of GTL Infrastructure is held by Institutions

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If you want to know who really controls GTL Infrastructure Limited (NSE:GTLINFRA), then you'll have to look at the makeup of its share registry. With 58% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Retail investors gained the most after market cap touched ₹24b last week, while institutions who own 37% also benefitted.

In the chart below, we zoom in on the different ownership groups of GTL Infrastructure.

See our latest analysis for GTL Infrastructure

What Does The Institutional Ownership Tell Us About GTL Infrastructure?

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 GTL Infrastructure. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of GTL Infrastructure, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in GTL Infrastructure. Our data shows that Union Asset Management Company Pvt. Ltd. is the largest shareholder with 12% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.3% and 5.7%, of the shares outstanding, respectively.

Our studies suggest that the top 21 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of GTL Infrastructure

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. 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 data suggests that insiders own under 1% of GTL Infrastructure Limited in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. It has a market capitalization of just ₹24b, and the board has only ₹16m worth of shares in their own names. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 58% of GTL Infrastructure shares. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

We can see that Private Companies own 4.0%, of the shares on issue. 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 GTL Infrastructure better, we need to consider many other factors. For example, we've discovered 2 warning signs for GTL Infrastructure (1 is a bit unpleasant!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. So take a peek at this free 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.