Category: General
Country: India
By Simply Wall St Published January 16, 2022
Every investor in Vardhman Textiles Limited (NSE:VTL) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private companies with 34% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Clearly, private companies benefitted the most after the company's market cap rose by ₹7.5b last week.
Let's take a closer look to see what the different types of shareholders can tell us about Vardhman Textiles.
View our latest analysis for Vardhman Textiles:
NSEI:VTL Ownership Breakdown January 16th 2022
What Does The Institutional Ownership Tell Us About Vardhman Textiles?
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.
We can see that Vardhman Textiles 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 Vardhman Textiles' earnings history below. Of course, the future is what really matters.
NSEI:VTL Earnings and Revenue Growth January 16th 2022
We note that hedge funds don't have a meaningful investment in Vardhman Textiles. Our data shows that Vardhman Holdings Limited is the largest shareholder with 28% of shares outstanding. In comparison, the second and third largest shareholders hold about 18% and 11% of the stock. Additionally, the company's CEO Shri Oswal directly holds 1.1% of the total shares outstanding.
A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 56% stake.
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 Vardhman Textiles
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
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.
Shareholders would probably be interested to learn that insiders own shares in Vardhman Textiles 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 ₹2.9b worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, who are usually individual investors, hold a 14% stake in Vardhman Textiles. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Private Company Ownership
It seems that Private Companies own 34%, of the Vardhman Textiles stock. 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.
Public Company Ownership
We can see that public companies hold 28% of the Vardhman Textiles shares on issue. 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. Take risks for example - Vardhman Textiles has 3 warning signs we think 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.
Courtesy: https://simplywall.st/stocks/in/consumer-durables/nse-vtl/vardhman-textiles-shares/news/private-companies-in-vardhman-textiles-limited-nsevtl-are-it
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