With a 65% stake, Narayana Hrudayalaya Limited (NSE:NH) insiders have a lot riding on the company

Key Insights

• Narayana Hrudayalaya's significant insider ownership suggests inherent interests in company's expansion
• The top 3 shareholders own 52% of the company
• Institutional ownership in Narayana Hrudayalaya is 14%

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To get a sense of who is truly in control of Narayana Hrudayalaya Limited (NSE:NH), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 65% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

So it follows, every decision made by insiders of Narayana Hrudayalaya regarding the company's future would be crucial to them.

Let's delve deeper into each type of owner of Narayana Hrudayalaya, beginning with the chart below.

See our latest analysis for Narayana Hrudayalaya

What Does The Institutional Ownership Tell Us About Narayana Hrudayalaya?

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 Narayana Hrudayalaya. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Narayana Hrudayalaya, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Narayana Hrudayalaya. Shakuntala Shetty is currently the largest shareholder, with 36% of shares outstanding. For context, the second largest shareholder holds about 12% of the shares outstanding, followed by an ownership of 5.0% by the third-largest shareholder. Interestingly, the bottom two of the top three shareholders also hold the title of Top Key Executive and Vice Chairman, respectively, suggesting that these insiders have a personal stake in the company.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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

Insider Ownership Of Narayana Hrudayalaya

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.

It seems that insiders own more than half the Narayana Hrudayalaya Limited stock. This gives them a lot of power. That means insiders have a very meaningful ₹251b stake in this ₹386b business. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

With a 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Narayana Hrudayalaya. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Narayana Hrudayalaya better, we need to consider many other factors.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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.