Institutions along with public companies who hold considerable shares inCoromandel International Limited (NSE:COROMANDEL) come under pressure; lose 3.4% of holdings value
Key Insights
- Significant control over Coromandel International by public companies implies that the general public has more power to influence management and governance-related decisions
- The largest shareholder of the company is E.I.D.- Parry (India) Limited with a 56% stake
- Institutions own 24% of Coromandel International
Every investor in Coromandel International Limited (NSE:COROMANDEL) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are public companies with 56% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
While institutions, who own 24% shares weren’t spared from last week’s ₹24b market cap drop, public companies as a group suffered the maximum losses
Let's delve deeper into each type of owner of Coromandel International, beginning with the chart below.
View our latest analysis for Coromandel International
What Does The Institutional Ownership Tell Us About Coromandel International?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
We can see that Coromandel International 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Coromandel International's earnings history below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in Coromandel International. E.I.D.- Parry (India) Limited is currently the company's largest shareholder with 56% of shares outstanding. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 4.5% of the shares outstanding, followed by an ownership of 2.0% by the third-largest shareholder.
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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Coromandel International
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.
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.
Our information suggests that Coromandel International Limited insiders own under 1% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. Keep in mind that it's a big company, and the insiders own ₹3.1b worth of shares. The absolute value might be more important than the proportional share. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 16% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Public Company Ownership
We can see that public companies hold 56% of the Coromandel International shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
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. For example, we've discovered 1 warning sign for Coromandel International that you should be aware of before investing here.
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.