What you need to know about the investor makeup of Pidilite Industries Limited (NSE: PIDILITIND)
Every investor in Pidilite Industries Limited (NSE: PIDILITIND) should know the most powerful shareholder groups. Generally speaking, as a business grows, institutions increase their participation. Conversely, insiders often decrease their ownership over time. I like to see at least a little insider ownership. As Charlie Munger said, “Show me the incentive and I’ll show you the result.
Pidilite Industries is a pretty big company. It has a market capitalization of 1.2t. Normally, institutions would own a significant share of a company of this size. 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 find out more about Pidilite Industries.
See our latest review for Pidilite Industries
What does institutional ownership tell us about Pidilite Industries?
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.
We see that Pidilite Industries has institutional investors; and they own a good portion of the company’s shares. This may indicate that the company has a certain degree of credibility in the investment community. However, it is better to be careful not to rely on the so-called validation that accompanies institutional investors. They too are sometimes wrong. 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 Pidilite Industries’ historical revenue and revenue below, but keep in mind that there is always more to tell.
We note that hedge funds do not have a significant investment in Pidilite Industries. Our data shows that Narendrakumar Parekh is the largest shareholder with 11% of the shares outstanding. For context, the second largest shareholder owns around 10% of the outstanding shares, followed by an 8.1% stake by the third largest shareholder. Madhukar Parekh, who is the second shareholder, also holds the title of Top Key Executive.
We also observed that the top 7 shareholders make up more than half of the share register, with a few smaller shareholders to some extent to balance the interests of the larger ones.
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. Many analysts cover the stock, so it can be interesting to see what they are forecasting as well.
Insider property of Pidilite Industries
The definition of an insider may differ slightly from country to country, but board members still count. The management of the company manages the company, but the CEO will report to the board of directors, even if he is a member of the board.
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 most recent data indicates that insiders own the majority of Pidilite Industries Limited. This means that they can collectively make decisions for the business. This means that the insiders have a very significant 622 billion yen stake in this 1.2 billion yen company. It’s good to see this level of investment. You can check here if these insiders have sold any of their shares.
General public property
The general public has an 18% stake in Pidilite Industries. 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.
Owned by a private company
We can see that the private companies own 19% of the issued shares. It is difficult to draw conclusions from this fact alone, so it is worth considering who owns these private companies. Sometimes insiders or other related parties have an interest in shares of a public company through a separate private company.
I find it very interesting to see who exactly owns a company. But to really get an overview, we have to take other information into account as well. To do this, you need to know the 2 warning signs we spotted with Pidilite Industries.
If you’d rather find out what analysts are predicting in terms of future growth, don’t miss this free analyst forecast report.
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 material. Simply Wall St has no position in the mentioned stocks.
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