While institutions own 25% of Reliance Industries Limited (NSE: RELIANCEP1), private companies are its main shareholders with a 48% stake.

If you want to know who really controls Reliance Industries Limited (NSE: RELIANCEP1) then you will need to look at the makeup of its share register. The group with the most shares in the company, around 48% to be precise, are the private companies. In other words, the group has everything to gain (or lose the most) from its investment in the business.

And the institutions on the other hand have a 25% stake in the company. Institutions often own shares in more established companies, while it is not uncommon to see insiders owning a good number of smaller companies.

In the table below, we zoom in on the different ownership groups of Reliance Industries.

See our latest review for Reliance Industries

Distribution of the NSEI property: RELIANCEP1 November 20, 2021

What does institutional ownership tell us about Reliance Industries?

Many institutions measure their performance against an index that approximates the local market. Thus, they generally pay more attention to companies that are included in the major indices.

As you can see, institutional investors have a significant stake in Reliance Industries. This implies that analysts working for these institutions have reviewed the action and appreciate it. But like everyone else, they could be 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 shares quickly. This risk is higher in a company without a history of growth. You can see Reliance Industries historical revenue and revenue below, but keep in mind that there is always more to tell.

profit and revenue growth
NSEI: RELIANCEP1 Profits and Revenue Growth November 20, 2021

We note that the hedge funds do not have a significant investment in Reliance Industries. Looking at our data we can see that the largest shareholder is Srichakra Commercials Llp with 11% of the shares outstanding. The second and third largest shareholders are Karuna Commercials LLP and Devarshi Commercials LLP, with an equal number of shares in their name at 8.0%. Additionally, we found that Mukesh Ambani, the CEO, owns 0.7% of the shares attributed to their name.

We also observed that the top 8 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 it makes sense to study a company’s institutional ownership data, it also makes sense to study analysts’ sentiments to know which way the wind is blowing. There are a lot of analysts covering the stock, so you can look at expected growth quite easily.

Insider Ownership of Reliance 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.

I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.

We can report that insiders own shares of Reliance Industries Limited. Insiders have a significant stake worth 166b. sometimes we are interested in whether they bought or sold.

General public property

The general public, who are typically individual investors, own a 24% stake in Reliance Industries. While this group cannot necessarily take the lead, it can certainly have a real influence on how the business is run.

Owned by a private company

It appears that private companies own 48% of the shares of Reliance Industries. It might be worth pursuing the matter 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 Reliance Industries, there are many other factors that we need to consider.

I like to dive deeper on the performance of a company in the past. You can find the history of income and earnings in this detailed graphic.

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 documents. Simply Wall St has no position in any of the stocks mentioned.

Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.

Comments are closed.