Nasdaq
華爾街日報Archean Chemical Industries Limited's (NSE:ACI) market cap touched ₹71b last week, benefiting both private companies who own 31% as well as institutions
Key Insights
- The considerable ownership by private companies in Archean Chemical Industries indicates that they collectively have a greater say in management and business strategy
- The top 2 shareholders own 53% of the company
- Insider ownership in Archean Chemical Industries is 23%
Every investor in Archean Chemical Industries Limited (NSE:ACI) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private companies with 31% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While private companies were the group that reaped the most benefits after last week’s 7.0% price gain, institutions also received a 26% cut.
In the chart below, we zoom in on the different ownership groups of Archean Chemical Industries.
See our latest analysis for Archean Chemical Industries
What Does The Institutional Ownership Tell Us About Archean Chemical Industries?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
We can see that Archean Chemical Industries 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. 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 Archean Chemical Industries' historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Archean Chemical Industries. Our data shows that Chemikas Speciality Llp is the largest shareholder with 31% of shares outstanding. With 23% and 6.9% of the shares outstanding respectively, Ranjit Pendurthi and SBI Funds Management Limited are the second and third largest shareholders. Ranjit Pendurthi, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.
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 53% 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 Archean Chemical Industries
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 information suggests that insiders maintain a significant holding in Archean Chemical Industries Limited. Insiders have a ₹16b stake in this ₹71b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
General Public Ownership
The general public-- including retail investors -- own 21% stake in the company, and hence can't easily be ignored. 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 31%, of the Archean Chemical Industries stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the 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 Archean Chemical Industries you should be aware of.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.
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.