Olectra Greentech Limited’s (NSE:OLECTRA) 15% drop last week must have disappointed private companies with large stakes
To get an idea of who actually controls Olectra Greentech Limited (NSE: OLECTRA), it is important to understand the ownership structure of the company. With 56% of the capital, private companies hold the maximum shares in the company. In other words, the group faces the maximum upside potential (or downside risk).
As the market capitalization fell to ₹46 billion last week, private companies are believed to have suffered the highest losses than any other corporate shareholder group.
In the table below, we zoom in on the different ownership groups of Olectra Greentech.
See our latest analysis for Olectra Greentech
What does institutional ownership tell us about Olectra Greentech?
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.
Olectra Greentech already has institutions registered in the share register. Indeed, they hold a respectable stake in the company. This suggests some credibility with professional investors. But we cannot rely solely on this fact since institutions sometimes make bad investments, like everyone else. It is not uncommon to see a sharp decline in the stock price if two large institutional investors attempt to sell a stock at the same time. It is therefore worth checking the past earnings trajectory of Olectra Greentech (below). Of course, keep in mind that there are other factors to consider as well.
We note that hedge funds have no significant investment in Olectra Greentech. Megha Engineering & Infrastructures Limited is currently the largest shareholder of the company with 50% of the outstanding shares. This implies that they have majority control over the future of the company. With 4.2% and 3.8% of shares outstanding, respectively, Gyanmay Investment Advisors LLP and Nomura Asset Management Co., Ltd. are the second and third shareholders.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. Our information suggests that there is no analyst coverage of the stock, so it is probably little known.
Insider Ownership of Olectra Greentech
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.
Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
Our most recent data indicates that insiders hold shares of Olectra Greentech Limited. As individuals, Insiders collectively own ₹2.7 billion of the ₹46 billion society. It’s good to see insider investing, but it might be worth checking to see if those insiders have been buying.
General public property
The general public, generally individual investors, holds 31% of the capital of Olectra Greentech. While this size of ownership may not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.
Private Company Ownership
Our data indicates that private companies own 56% of the company’s shares. It might be worth exploring this further. If related parties, such as insiders, have an interest in any of these private companies, this should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
While it is worth considering the different groups that own a business, there are other, even more important factors. Take risks for example – Olectra Greentech has 1 warning sign we think you should know.
Sure this may not be the best stock to buy. Therefore, you may want to see our free set of interesting prospects benefiting from a favorable financial situation.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.