What does the ownership structure of 3M India Limited (NSE: 3MINDIA) look like?
The large groups of shareholders of 3M India Limited (NSE: 3MINDIA) have power over the company. Generally speaking, as a company grows, institutions increase their ownership. Conversely, insiders often decrease their ownership over time. Companies that were previously publicly owned tend to have less insider ownership.
With a market cap of ₹259 billion, 3M India is pretty big. We expect to see institutional investors on the register. Companies of this size are also generally well known to retail investors. Our analysis of company ownership, below, shows that institutional investors have bought the company. We can zoom in on the different ownership groups, to learn more about 3M India.
See our latest analysis for 3M India
What does institutional ownership tell us about 3M India?
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.
As you can see, institutional investors own a sizeable share of 3M India. This suggests some credibility with professional investors. But we cannot rely solely on this fact since institutions sometimes make bad investments, like everyone else. If multiple institutions change their minds on a stock at the same time, you could see the stock price drop quickly. So it is worth checking out the earnings history of 3M India below. Of course, the future is what really matters.
3M India is not owned by hedge funds. Looking at our data, we can see that the major shareholder is 3M Company with 75% of the shares outstanding. This implies that they have majority control over the future of the company. With respectively 1.6% and 1.5% of the outstanding shares, UTI Asset Management Company Limited and Bright Star Investments Limited 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. There is a little analyst coverage of the stock, but not much. So there is room for him to gain coverage.
Insider ownership of 3M India
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company runs the company, but the CEO will answer to the board of directors, even if he is a member of it.
Most view insider ownership as a positive because it can indicate that the board is well aligned with other shareholders. However, there are times when too much power is concentrated within this group.
Our data suggests that insiders own less than 1% of 3M India Limited in their own name. But they may have an indirect interest through a corporate structure that we have not noted. It’s a big company, so even a small proportionate interest can create alignment between the board and shareholders. In this case, insiders own 901 million shares. Arguably, recent purchases and sales are equally important to consider. You can click here to see if insiders have been buying or selling.
General public property
With a 14% stake, the general public, consisting mainly of individual investors, has some influence over 3M India. This size of ownership, although considerable, may not be sufficient to change company policy if the decision is not in line with other major shareholders.
Ownership of a public company
We can see that public companies own 75% of the outstanding 3M India shares. It may be a strategic interest and both companies may have related business interests. They may have separated. This exploitation probably deserves further investigation.
It is always useful to think about the different groups that own shares in a company. But to better understand 3M India, we need to consider many other factors.
I like to dive deeper on the performance of a company in the past. You can find Earnings and Earnings History in this detailed graph.
But finally it’s the future, not the past, that will determine the success of the owners of this business. Therefore, we think it’s advisable to take a look at this free report showing whether analysts are predicting a brighter future.
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.