Institutions profited after Aditya Birla Sun Life AMC Limited's (NSE:ABSLAMC) market cap rose ₹18b last week but public companies profited the most

Key Insights

• Significant control over Aditya Birla Sun Life AMC by public companies implies that the general public has more power to influence management and governance-related decisions
• 75% of the business is held by the top 2 shareholders
• Institutions own 40% of Aditya Birla Sun Life AMC

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To get a sense of who is truly in control of Aditya Birla Sun Life AMC Limited (NSE:ABSLAMC), it is important to understand the ownership structure of the business. We can see that public companies own the lion's share in the company with 47% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While public companies were the group that reaped the most benefits after last week’s 8.2% price gain, institutions also received a 40% cut.

Let's take a closer look to see what the different types of shareholders can tell us about Aditya Birla Sun Life AMC.

Check out our latest analysis for Aditya Birla Sun Life AMC

What Does The Institutional Ownership Tell Us About Aditya Birla Sun Life AMC?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Aditya Birla Sun Life AMC does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Aditya Birla Sun Life AMC's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Aditya Birla Sun Life AMC. Looking at our data, we can see that the largest shareholder is Grasim Industries Limited with 45% of shares outstanding. With 30% and 3.2% of the shares outstanding respectively, Sun Life (India) AMC Investments Inc. and Nippon Life India Asset Management Limited are the second and third largest shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 75% stake.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Aditya Birla Sun Life AMC

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 data suggests that insiders own under 1% of Aditya Birla Sun Life AMC Limited in their own names. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around ₹47m worth of shares (at current prices). It is good to see board members owning shares, 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 12% stake in Aditya Birla Sun Life AMC. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

It appears to us that public companies own 47% of Aditya Birla Sun Life AMC. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we've spotted with Aditya Birla Sun Life AMC .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.