Public companies among Kansai Nerolac Paints Limited's (NSE:KANSAINER) largest shareholders, saw gain in holdings value after stock jumped 9.1% last week
Key Insights
- Significant control over Kansai Nerolac Paints 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 Kansai Paint Co., Ltd. with a 75% stake
- Institutional ownership in Kansai Nerolac Paints is 10%
Every investor in Kansai Nerolac Paints Limited (NSE:KANSAINER) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are public companies with 75% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
As a result, public companies were the biggest beneficiaries of last week’s 9.1% gain.
Let's take a closer look to see what the different types of shareholders can tell us about Kansai Nerolac Paints.
View our latest analysis for Kansai Nerolac Paints
What Does The Institutional Ownership Tell Us About Kansai Nerolac Paints?
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.
Kansai Nerolac Paints already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Kansai Nerolac Paints' historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Kansai Nerolac Paints. Kansai Paint Co., Ltd. is currently the company's largest shareholder with 75% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With 3.6% and 1.4% of the shares outstanding respectively, Life Insurance Corporation of India and Nippon Life India Asset Management Limited are the second and third largest shareholders.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Kansai Nerolac Paints
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
We note our data does not show any board members holding shares, personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.
General Public Ownership
With a 14% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Kansai Nerolac Paints. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Public Company Ownership
It appears to us that public companies own 75% of Kansai Nerolac Paints. 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:
It's always worth thinking about the different groups who own shares in a company. But to understand Kansai Nerolac Paints better, we need to consider many other factors. For instance, we've identified 3 warning signs for Kansai Nerolac Paints (1 makes us a bit uncomfortable) that you should be aware of.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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.