Both retail investors who control a good portion of PTC India Limited (NSE:PTC) along with institutions must be dismayed after last week's 12% decrease

Key Insights

• The considerable ownership by retail investors in PTC India indicates that they collectively have a greater say in management and business strategy
• The top 20 shareholders own 50% of the company
• Institutional ownership in PTC India is 33%

Every investor in PTC India Limited (NSE:PTC) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 46% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While institutions, who own 33% shares weren’t spared from last week’s ₹5.2b market cap drop, retail investors as a group suffered the maximum losses

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

View our latest analysis for PTC India

What Does The Institutional Ownership Tell Us About PTC India?

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 PTC India. 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 PTC India, (below). Of course, keep in mind that there are other factors to consider, too.

PTC India is not owned by hedge funds. The company's largest shareholder is Life Insurance Corporation of India, Asset Management Arm, with ownership of 4.9%. The second and third largest shareholders are Power Grid Corporation of India Limited and NTPC Limited, with an equal amount of shares to their name at 4.1%.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 20 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of PTC India

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

We can report that insiders do own shares in PTC India Limited. As individuals, the insiders collectively own ₹998m worth of the ₹40b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

With a 46% ownership, the general public, mostly comprising of individual investors, have some degree of sway over PTC India. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 3.4%, of the PTC India stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

We can see that public companies hold 12% of the PTC India shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand PTC India better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for PTC India you should know about.

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.