Nasdaq
華爾街日報Private companies are Privi Speciality Chemicals Limited's (NSE:PRIVISCL) biggest owners and were hit after market cap dropped ₹5.1b
Key Insights
- Significant control over Privi Speciality Chemicals by private companies implies that the general public has more power to influence management and governance-related decisions
- A total of 2 investors have a majority stake in the company with 51% ownership
- Insider ownership in Privi Speciality Chemicals is 24%
A look at the shareholders of Privi Speciality Chemicals Limited (NSE:PRIVISCL) can tell us which group is most powerful. We can see that private companies own the lion's share in the company with 54% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Following a 4.0% decrease in the stock price last week, private companies suffered the most losses, but insiders who own 24% stock also took a hit.
Let's take a closer look to see what the different types of shareholders can tell us about Privi Speciality Chemicals.
Check out our latest analysis for Privi Speciality Chemicals
What Does The Institutional Ownership Tell Us About Privi Speciality Chemicals?
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.
Privi Speciality Chemicals already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Privi Speciality Chemicals' historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Privi Speciality Chemicals. Our data shows that Vivira Investment And Trading Co. Pvt. Ltd is the largest shareholder with 39% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 12% and 8.7%, of the shares outstanding, respectively. Mahesh Babani, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.
After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.
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. There is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Privi Speciality Chemicals
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 most recent data indicates that insiders own a reasonable proportion of Privi Speciality Chemicals Limited. It has a market capitalization of just ₹122b, and insiders have ₹29b 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, who are usually individual investors, hold a 17% stake in Privi Speciality Chemicals. 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
We can see that Private Companies own 54%, 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:
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. Case in point: We've spotted 1 warning sign for Privi Speciality Chemicals you should be aware of.
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.