Recent 9.6% decline may not have gone down well with KPI Green Energy Limited (NSE:KPIGREEN) insiders who've been purchasing recently

Key Insights

• Significant insider control over KPI Green Energy implies vested interests in company growth
• 51% of the business is held by the top 2 shareholders
• Insiders have been buying lately

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If you want to know who really controls KPI Green Energy Limited (NSE:KPIGREEN), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 54% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

It's interesting to note that insiders have been buying shares recently. Their expectations, however, were not satisfied, as the market cap dropped to ₹75b over the past week.

Let's delve deeper into each type of owner of KPI Green Energy, beginning with the chart below.

Check out our latest analysis for KPI Green Energy

What Does The Institutional Ownership Tell Us About KPI Green Energy?

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 KPI Green Energy 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 KPI Green Energy, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in KPI Green Energy. Our data suggests that Farukbhai Patel, who is also the company's Top Key Executive, holds the most number of shares at 49%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. For context, the second largest shareholder holds about 1.9% of the shares outstanding, followed by an ownership of 1.7% by the third-largest shareholder.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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

Insider Ownership Of KPI Green Energy

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. 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.

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.

Our most recent data indicates that insiders own the majority of KPI Green Energy Limited. This means they can collectively make decisions for the company. So they have a ₹40b stake in this ₹75b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 39% stake in the company, and hence can't easily be ignored. 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 KPI Green Energy better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.