The Shipping Corporation of India Limited's (NSE:SCI) stock price dropped 4.9% last week; state or government would not be happy

Key Insights

• Significant control over Shipping Corporation of India by state or government implies that the general public has more power to influence management and governance-related decisions
• India owns 64% of the company
• Institutions own 11% of Shipping Corporation of India

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Every investor in The Shipping Corporation of India Limited (NSE:SCI) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 64% to be precise, is state or government. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, state or government as a group endured the highest losses last week after market cap fell by ₹5.2b.

Let's take a closer look to see what the different types of shareholders can tell us about Shipping Corporation of India.

Check out our latest analysis for Shipping Corporation of India

What Does The Institutional Ownership Tell Us About Shipping Corporation of India?

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 Shipping Corporation of India does have institutional investors; and they hold a good portion of the company's 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. 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 Shipping Corporation of India, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Shipping Corporation of India. The company's largest shareholder is India, with ownership of 64%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Meanwhile, the second and third largest shareholders, hold 4.5% and 2.6%, of the shares outstanding, respectively.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Shipping Corporation of India

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 data cannot confirm that board members are holding shares personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shipping Corporation of India. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shipping Corporation of India better, we need to consider many other factors. For example, we've discovered 1 warning sign for Shipping Corporation of India 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.