Stock Analysis

What Kind Of Shareholders Hold The Majority In Arshiya Limited's (NSE:ARSHIYA) Shares?

NSEI:ARSHIYA
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If you want to know who really controls Arshiya Limited (NSE:ARSHIYA), then you'll have to look at the makeup of its share registry. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

Arshiya is not a large company by global standards. It has a market capitalization of ₹7.4b, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutions are not really that prevalent on the share registry. Let's delve deeper into each type of owner, to discover more about Arshiya.

See our latest analysis for Arshiya

ownership-breakdown
NSEI:ARSHIYA Ownership Breakdown January 14th 2021

What Does The Institutional Ownership Tell Us About Arshiya?

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.

Since institutions own only a small portion of Arshiya, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

earnings-and-revenue-growth
NSEI:ARSHIYA Earnings and Revenue Growth January 14th 2021

We note that hedge funds don't have a meaningful investment in Arshiya. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Arshiya's case, its Co-Chief Executive Officer, Archana Mittal, is the largest shareholder, holding 34% of shares outstanding. For context, the second largest shareholder holds about 19% of the shares outstanding, followed by an ownership of 15% by the third-largest shareholder. Interestingly, the third-largest shareholder, Ajay Mittal is also a Chairman of the Board, again, indicating strong insider ownership amongst the company's top shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 54% stake.

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. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Arshiya

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

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 information suggests that insiders own more than half of Arshiya Limited. This gives them effective control of the company. That means they own ₹3.7b worth of shares in the ₹7.4b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public holds a 21% stake in Arshiya. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Public Company Ownership

Public companies currently own 24% of Arshiya stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Arshiya , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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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