Private companies who have a significant stake must be disappointed along with institutions after JSW Energy Limited's (NSE:JSWENERGY) market cap dropped by ₹81b

Key Insights

• Significant control over JSW Energy by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 4 shareholders own 54% of the company
• Institutions own 18% of JSW Energy

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A look at the shareholders of JSW Energy Limited (NSE:JSWENERGY) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 51% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 8.8% decrease in the stock price last week, private companies suffered the most losses, but institutions who own 18% stock also took a hit.

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

View our latest analysis for JSW Energy

What Does The Institutional Ownership Tell Us About JSW Energy?

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.

As you can see, institutional investors have a fair amount of stake in JSW Energy. 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 JSW Energy, (below). Of course, keep in mind that there are other factors to consider, too.

JSW Energy is not owned by hedge funds. Jsw Investments Private Limited is currently the company's largest shareholder with 18% of shares outstanding. In comparison, the second and third largest shareholders hold about 15% and 13% of the stock.

On looking further, we found that 54% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of JSW Energy

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Shareholders would probably be interested to learn that insiders own shares in JSW Energy Limited. The insiders have a meaningful stake worth ₹35b. we sometimes take an interest in whether they have been buying or selling.

General Public Ownership

With a 13% ownership, the general public, mostly comprising of individual investors, have some degree of sway over JSW Energy. 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.

Private Company Ownership

We can see that Private Companies own 51%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Public Company Ownership

It appears to us that public companies own 14% of JSW Energy. 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 JSW Energy better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for JSW Energy you should be aware of, and 1 of them is significant.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.