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    RHI Magnesita India Limited's (NSE:RHIM) market cap touched ₹95b last week, benefiting both public companies who own 56% as well as institutions

    Simply Wall St·05/16/2025 00:30:36
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    Key Insights

    • Significant control over RHI Magnesita India by public companies implies that the general public has more power to influence management and governance-related decisions
    • The largest shareholder of the company is RHI Magnesita N.V. with a 56% stake
    • Institutions own 17% of RHI Magnesita India

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    Every investor in RHI Magnesita India Limited (NSE:RHIM) should be aware of the most powerful shareholder groups. With 56% stake, public companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

    Following a 5.1% increase in the stock price last week, public companies profited the most, but institutions who own 17% stock also stood to gain from the increase.

    In the chart below, we zoom in on the different ownership groups of RHI Magnesita India.

    See our latest analysis for RHI Magnesita India

    ownership-breakdown
    NSEI:RHIM Ownership Breakdown May 16th 2025

    What Does The Institutional Ownership Tell Us About RHI Magnesita India?

    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 RHI Magnesita India 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see RHI Magnesita India's historic earnings and revenue below, but keep in mind there's always more to the story.

    earnings-and-revenue-growth
    NSEI:RHIM Earnings and Revenue Growth May 16th 2025

    RHI Magnesita India is not owned by hedge funds. RHI Magnesita N.V. is currently the largest shareholder, with 56% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Meanwhile, the second and third largest shareholders, hold 13% and 2.8%, of the shares outstanding, respectively.

    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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

    Insider Ownership Of RHI Magnesita India

    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. 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.

    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 information suggests that RHI Magnesita India Limited insiders own under 1% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own ₹1.8m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

    General Public Ownership

    With a 13% ownership, the general public, mostly comprising of individual investors, have some degree of sway over RHI Magnesita 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

    We can see that Private Companies own 13%, of the shares on issue. 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

    Public companies currently own 56% of RHI Magnesita India stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

    Next Steps:

    While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with RHI Magnesita India , and understanding them should be part of your investment process.

    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.