- India
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- Renewable Energy
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- NSEI:JPPOWER
Jaiprakash Power Ventures Limited's (NSE:JPPOWER) market cap surged ₹5.9b last week, retail investors who have a lot riding on the company were rewarded
Key Insights
- The considerable ownership by retail investors in Jaiprakash Power Ventures indicates that they collectively have a greater say in management and business strategy
- The top 7 shareholders own 51% of the company
- Institutional ownership in Jaiprakash Power Ventures is 21%
Every investor in Jaiprakash Power Ventures Limited (NSE:JPPOWER) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 43% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Clearly, retail investors benefitted the most after the company's market cap rose by ₹5.9b last week.
In the chart below, we zoom in on the different ownership groups of Jaiprakash Power Ventures.
Check out our latest analysis for Jaiprakash Power Ventures
What Does The Institutional Ownership Tell Us About Jaiprakash Power Ventures?
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 Jaiprakash Power Ventures does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Jaiprakash Power Ventures
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. 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.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
We can report that insiders do own shares in Jaiprakash Power Ventures Limited. The insiders have a meaningful stake worth ₹6.4b. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 43% stake in Jaiprakash Power Ventures. 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.
Public Company Ownership
It appears to us that public companies own 24% of Jaiprakash Power Ventures. 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 risks, for instance. Every company has them, and we've spotted 1 warning sign for Jaiprakash Power Ventures you should know about.
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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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.
About NSEI:JPPOWER
Jaiprakash Power Ventures
Engages in the power generation and cement grinding businesses in India and internationally.
Excellent balance sheet and good value.