Tata Communications Limited (NSE:TATACOMM) most popular amongst private companies who own 45% of the shares, institutions hold 43%
Key Insights
- Tata Communications' significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
- The top 2 shareholders own 59% of the company
- 43% of Tata Communications is held by Institutions
Every investor in Tata Communications Limited (NSE:TATACOMM) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private companies with 45% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And institutions on the other hand have a 43% ownership in the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.
Let's delve deeper into each type of owner of Tata Communications, beginning with the chart below.
See our latest analysis for Tata Communications
What Does The Institutional Ownership Tell Us About Tata Communications?
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 Tata Communications does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Tata Communications, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don't have many shares in Tata Communications. Looking at our data, we can see that the largest shareholder is Panatone Finvest Limited with 45% of shares outstanding. In comparison, the second and third largest shareholders hold about 14% and 4.7% of the stock.
A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 59% stake.
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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Tata Communications
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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 Tata Communications Limited. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around ₹8.1b worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 10% 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 45%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Tata Communications better, we need to consider many other factors. Take risks for example - Tata Communications has 3 warning signs (and 1 which is concerning) we think you should know about.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.