Private companies in Marathon Nextgen Realty Limited (NSE:MARATHON) are its biggest bettors, and their bets paid off as stock gained 11% last week

Key Insights

• The considerable ownership by private companies in Marathon Nextgen Realty indicates that they collectively have a greater say in management and business strategy
• 51% of the company is held by a single shareholder (Marathon Realty Pvt. Ltd.)
• 17% of Marathon Nextgen Realty is held by Institutions

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A look at the shareholders of Marathon Nextgen Realty Limited (NSE:MARATHON) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 52% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, private companies collectively scored the highest last week as the company hit ₹37b market cap following a 11% gain in the stock.

Let's delve deeper into each type of owner of Marathon Nextgen Realty, beginning with the chart below.

View our latest analysis for Marathon Nextgen Realty

What Does The Institutional Ownership Tell Us About Marathon Nextgen Realty?

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 Marathon Nextgen Realty 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. 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 Marathon Nextgen Realty's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Marathon Nextgen Realty. Marathon Realty Pvt. Ltd. is currently the company's largest shareholder with 51% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. For context, the second largest shareholder holds about 9.5% of the shares outstanding, followed by an ownership of 2.8% by the third-largest shareholder. Furthermore, CEO Chetan Shah is the owner of 1.1% of the company's shares.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Marathon Nextgen Realty

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.

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 most recent data indicates that insiders own some shares in Marathon Nextgen Realty Limited. It has a market capitalization of just ₹37b, and insiders have ₹3.5b worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 21% stake in Marathon Nextgen Realty. 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.

Private Company Ownership

We can see that Private Companies own 52%, of the shares on issue. 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 Marathon Nextgen Realty better, we need to consider many other factors. For instance, we've identified 2 warning signs for Marathon Nextgen Realty (1 is a bit concerning) that you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.