What types of shareholders hold the majority of Amara Raja Batteries Limited (NSE: AMARAJABAT) shares?

A look at the shareholders of Amara Raja Batteries Limited (NSE: AMARAJABAT) can tell us which group is more powerful. Institutions often own shares in more established companies, while it is not uncommon to see insiders owning a good number of smaller companies. Companies that have been privatized tend to have low insider ownership.

Amara Raja Batteries isn’t huge, but it’s not particularly small either. He has a market cap of ₹ 119b which means he generally expects to see certain institutions listed on the share register. Looking at our data on ownership groups (below), it looks like institutional investors bought the company. Let’s dig deeper into each type of owner, to learn more about Amara Raja batteries.

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Distribution of the NSEI property: AMARAJABAT October 24, 2021

What does institutional ownership tell us about Amara Raja batteries?

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 businesses to have some institutions listed, especially if they are growing.

As you can see, institutional investors have a large stake in Amara Raja Batteries. This suggests some credibility among professional investors. But we cannot rely on this fact alone because institutions sometimes make bad investments, like everyone else. When several institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes awry, several parties may compete with each other to sell stocks quickly. This risk is higher in a company with no history of growth. You can see Amara Raja Batteries’ historical revenue and income below, but keep in mind that there is always more to tell.

profit and revenue growth
NSEI: AMARAJABAT Profits and Revenue Growth October 24, 2021

Hedge funds don’t have a lot of shares in Amara Raja Batteries. Rngalla Family Private Limited is currently the largest shareholder, with 28% of the shares outstanding. With respectively 14% and 9.9% of the shares outstanding, Clarios, LLC and Nalanda Capital Pte Ltd are the second and third shareholders.

After digging a little deeper, we found that the top 3 shareholders collectively control over half of the company’s stock, implying that they have considerable power to influence company decisions.

While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand the expected performance of a stock. As far as I know, there is no analyst coverage of the company, so it probably goes under the radar.

Insider property of Amara Raja batteries

The definition of company insiders can be subjective and vary from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.

Most view insider ownership as a positive, as it can indicate that the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that Amara Raja Batteries Limited insiders own less than 1% of the company. But they can have an indirect interest through a business structure that we have not chosen. It’s a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case, the insiders own shares worth 952 million yen. It’s good to see board members owning stocks, but it might be worth checking out if those insiders have bought.

General public property

The general public holds 24% of the capital of Amara Raja Batteries. While this property size may not be enough to influence a policy decision in their favor, they can still have a collective impact on company policies.

Private shareholders

With a 9.9% stake, private equity firms could influence the board of directors of Amara Raja Batteries. Some investors might be encouraged by this, as private equity is sometimes able to encourage strategies that help the market see the value of the business. Alternatively, these holders could withdraw from the investment after making it public.

Owned by a private company

Our data indicates that private companies own 43% of the company’s shares. It may be worth pursuing the question further. If related parties, such as insiders, have an interest in any of these private companies, this should be disclosed in the annual report. Private companies may also have a strategic interest in the business.

Next steps:

It’s always worth thinking about the different groups that own shares in a company. But to better understand Amara Raja batteries, there are many other factors that we need to take into account.

Many find it useful to take an in-depth look at how a business has performed in the past. You can access this detailed graphic past profits, income and cash flow.

Sure this might not be the best stock to buy. Therefore, you may want to see our free set of interesting prospects benefiting from a favorable financial situation.

NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.

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