Retail investors are Sterling and Wilson Renewable Energy Limited's (NSE:SWSOLAR) biggest owners and were hit after market cap dropped ₹6.1b
Key Insights
- Sterling and Wilson Renewable Energy's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
- The top 6 shareholders own 51% of the company
- 17% of Sterling and Wilson Renewable Energy is held by Institutions
If you want to know who really controls Sterling and Wilson Renewable Energy Limited (NSE:SWSOLAR), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 36% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
As market cap fell to ₹47b last week, retail investors would have faced the highest losses than any other shareholder groups of the company.
In the chart below, we zoom in on the different ownership groups of Sterling and Wilson Renewable Energy.
View our latest analysis for Sterling and Wilson Renewable Energy
What Does The Institutional Ownership Tell Us About Sterling and Wilson Renewable Energy?
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 Sterling and Wilson Renewable Energy. 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 Sterling and Wilson Renewable Energy, (below). Of course, keep in mind that there are other factors to consider, too.
Sterling and Wilson Renewable Energy is not owned by hedge funds. The company's largest shareholder is Reliance Industries Limited, with ownership of 32%. With 6.9% and 5.7% of the shares outstanding respectively, Shapoorji Pallonji And Company Private Limited and Khurshed Daruvala are the second and third largest shareholders. Khurshed Daruvala, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.
We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of Sterling and Wilson Renewable Energy
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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
We can report that insiders do own shares in Sterling and Wilson Renewable Energy Limited. In their own names, insiders own ₹3.6b worth of stock in the ₹47b company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 36% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
Our data indicates that Private Companies hold 6.9%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Public Company Ownership
Public companies currently own 32% of Sterling and Wilson Renewable Energy stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important.
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.
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.