Individual investors among VA Tech Wabag Limited's (NSE:WABAG) largest stockholders and were hit after last week's 4.8% price drop

Key Insights

• The considerable ownership by individual investors in VA Tech Wabag indicates that they collectively have a greater say in management and business strategy
• The top 25 shareholders own 49% of the company
• 28% of VA Tech Wabag is held by insiders

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To get a sense of who is truly in control of VA Tech Wabag Limited (NSE:WABAG), it is important to understand the ownership structure of the business. With 50% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of individual investors took a hit after last week’s 4.8% price drop, insiders with their 28% also suffered.

In the chart below, we zoom in on the different ownership groups of VA Tech Wabag.

See our latest analysis for VA Tech Wabag

What Does The Institutional Ownership Tell Us About VA Tech Wabag?

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.

We can see that VA Tech Wabag does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 VA Tech Wabag, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in VA Tech Wabag. The company's CEO Rajiv Mittal is the largest shareholder with 16% of shares outstanding. With 8.0% and 3.5% of the shares outstanding respectively, Rekha Jhunjhunwala and Subramanian Varadarajan are the second and third largest shareholders. Interestingly, the third-largest shareholder, Subramanian Varadarajan is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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 VA Tech Wabag

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

Our information suggests that insiders maintain a significant holding in VA Tech Wabag Limited. It has a market capitalization of just ₹86b, and insiders have ₹24b worth of shares in their own names. That's quite significant. 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 50% of VA Tech Wabag. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts .

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.