After losing 1.9% in the past year, Mahanagar Gas Limited (NSE:MGL) institutional owners must be relieved by the recent gain

Key Insights

• Significantly high institutional ownership implies Mahanagar Gas' stock price is sensitive to their trading actions
• A total of 4 investors have a majority stake in the company with 54% ownership
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

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To get a sense of who is truly in control of Mahanagar Gas Limited (NSE:MGL), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are institutions 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).

After a year of 1.9% losses, last week’s 3.9% gain would be welcomed by institutional investors as a possible sign that returns might start trending higher.

Let's delve deeper into each type of owner of Mahanagar Gas, beginning with the chart below.

Check out our latest analysis for Mahanagar Gas

What Does The Institutional Ownership Tell Us About Mahanagar Gas?

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.

Mahanagar Gas already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Mahanagar Gas, (below). Of course, keep in mind that there are other factors to consider, too.

Mahanagar Gas is not owned by hedge funds. GAIL (India) Limited is currently the company's largest shareholder with 32% of shares outstanding. With 10.0% and 6.5% of the shares outstanding respectively, Government of Maharashtra and Life Insurance Corporation of India, Asset Management Arm are the second and third largest shareholders.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Mahanagar Gas

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.

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. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.

General Public Ownership

The general public, who are usually individual investors, hold a 14% stake in Mahanagar Gas. 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

Public companies currently own 32% of Mahanagar Gas stock. 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 Mahanagar Gas better, we need to consider many other factors. For example, we've discovered 1 warning sign for Mahanagar Gas that you should be aware of before investing here.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.