BLS International Services Limited's (NSE:BLS) stock price dropped 3.4% last week; private companies would not be happy

Key Insights

• Significant control over BLS International Services by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 8 shareholders own 52% of the company
• 28% of BLS International Services is held by insiders

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To get a sense of who is truly in control of BLS International Services Limited (NSE:BLS), it is important to understand the ownership structure of the business. We can see that private companies own the lion's share in the company with 44% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 3.4% decrease in the stock price last week, private companies suffered the most losses, but insiders who own 28% stock also took a hit.

Let's delve deeper into each type of owner of BLS International Services, beginning with the chart below.

See our latest analysis for BLS International Services

What Does The Institutional Ownership Tell Us About BLS International Services?

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.

We can see that BLS International Services 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 BLS International Services, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in BLS International Services. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In BLS International Services' case, its Top Key Executive, Diwakar Aggarwal, is the largest shareholder, holding 13% of shares outstanding. Vinod Aggarwal is the second largest shareholder owning 9.6% of common stock, and Azadpur Finvest Private Limited holds about 4.9% of the company stock.

We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of BLS International Services

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 BLS International Services Limited. It has a market capitalization of just ₹132b, and insiders have ₹36b 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

With a 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over BLS International Services. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 44%, of the BLS International Services stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand BLS International Services better, we need to consider many other factors. Be aware that BLS International Services is showing 2 warning signs in our investment analysis , you should know about...

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.