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華爾街日報Retail investors among Tourism Finance Corporation of India Limited's (NSE:TFCILTD) largest stockholders and were hit after last week's 14% price drop
Key Insights
- Significant control over Tourism Finance Corporation of India by retail investors implies that the general public has more power to influence management and governance-related decisions
- A total of 14 investors have a majority stake in the company with 51% ownership
- Insiders own 31% of Tourism Finance Corporation of India
To get a sense of who is truly in control of Tourism Finance Corporation of India Limited (NSE:TFCILTD), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 40% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
While the holdings of retail investors took a hit after last week’s 14% price drop, insiders with their 31% also suffered.
In the chart below, we zoom in on the different ownership groups of Tourism Finance Corporation of India.
See our latest analysis for Tourism Finance Corporation of India
What Does The Institutional Ownership Tell Us About Tourism Finance Corporation of India?
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.
As you can see, institutional investors have a fair amount of stake in Tourism Finance Corporation of India. 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. 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 Tourism Finance Corporation of India's historic earnings and revenue below, but keep in mind there's always more to the story.
Tourism Finance Corporation of India is not owned by hedge funds. The company's largest shareholder is Aditya Halwasiya, with ownership of 21%. In comparison, the second and third largest shareholders hold about 4.4% and 4.2% of the stock.
A closer look at our ownership figures suggests that the top 14 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Tourism Finance Corporation of India
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our most recent data indicates that insiders own a reasonable proportion of Tourism Finance Corporation of India Limited. It has a market capitalization of just ₹26b, and insiders have ₹8.0b worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.
General Public Ownership
With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Tourism Finance Corporation of India. 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 12%, of the Tourism Finance Corporation of India 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:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 3 warning signs for Tourism Finance Corporation of India (1 doesn't sit too well with us) that you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.