Jaiprakash Power Ventures Limited's (NSE:JPPOWER) largest shareholders are retail investors who were rewarded as market cap surged ₹4.5b last week

Key Insights

• Significant control over Jaiprakash Power Ventures by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 7 shareholders own 51% of the company
• 21% of Jaiprakash Power Ventures is held by Institutions

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

To get a sense of who is truly in control of Jaiprakash Power Ventures Limited (NSE:JPPOWER), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 43% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, retail investors collectively scored the highest last week as the company hit ₹105b market cap following a 4.5% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Jaiprakash Power Ventures.

View our latest analysis for Jaiprakash Power Ventures

What Does The Institutional Ownership Tell Us About Jaiprakash Power Ventures?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Jaiprakash Power Ventures. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Jaiprakash Power Ventures, (below). Of course, keep in mind that there are other factors to consider, too.

Jaiprakash Power Ventures is not owned by hedge funds. The company's largest shareholder is Jaiprakash Associates Limited, with ownership of 24%. With 10.0% and 5.0% of the shares outstanding respectively, ICICI Bank Ltd., Asset Management Arm and Jaiprakash Power Ventures Limited, Employees Trust are the second and third largest shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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

Insider Ownership Of Jaiprakash Power Ventures

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Jaiprakash Power Ventures Limited. This is a big company, so it is good to see this level of alignment. Insiders own ₹5.3b worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 43% stake in the company, and hence can't easily be ignored. 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

We can see that public companies hold 24% of the Jaiprakash Power Ventures shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Jaiprakash Power Ventures better, we need to consider many other factors.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.