Public companies account for 41% of Bajaj Finserv Ltd.'s (NSE:BAJAJFINSV) ownership, while private companies account for 20%
Key Insights
- The considerable ownership by public companies in Bajaj Finserv indicates that they collectively have a greater say in management and business strategy
- The top 2 shareholders own 53% of the company
- Institutions own 16% of Bajaj Finserv
A look at the shareholders of Bajaj Finserv Ltd. (NSE:BAJAJFINSV) can tell us which group is most powerful. We can see that public companies own the lion's share in the company with 41% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Private companies, on the other hand, account for 20% of the company's stockholders.
Let's delve deeper into each type of owner of Bajaj Finserv, beginning with the chart below.
See our latest analysis for Bajaj Finserv
What Does The Institutional Ownership Tell Us About Bajaj Finserv?
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.
As you can see, institutional investors have a fair amount of stake in Bajaj Finserv. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Bajaj Finserv's historic earnings and revenue below, but keep in mind there's always more to the story.
Bajaj Finserv is not owned by hedge funds. Bajaj Holdings & Investment Limited is currently the company's largest shareholder with 41% of shares outstanding. Bajaj Sevashram Pvt. Ltd. is the second largest shareholder owning 12% of common stock, and Jaya Hind Investments Private Limited holds about 3.9% of the company stock.
To make our study more interesting, we found that the top 2 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Bajaj Finserv
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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.
We can report that insiders do own shares in Bajaj Finserv Ltd.. The insiders have a meaningful stake worth ₹117b. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public, who are usually individual investors, hold a 19% stake in Bajaj Finserv. 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 20%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Public Company Ownership
Public companies currently own 41% of Bajaj Finserv stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.
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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Bajaj Finserv , and understanding them should be part of your investment process.
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.