What type of shareholders make up the Biocon Limited share register (NSE: BIOCON)?

A look at the shareholders of Biocon Limited (NSE: BIOCON) can tell us which group is more powerful. Generally speaking, as a business grows, institutions increase their participation. Conversely, insiders often decrease their ownership over time. I generally like to see some degree of insider ownership, even if it’s just a little. As Nassim Nicholas Taleb said, “Don’t tell me what you think, tell me what you have in your wallet.

Biocon has a market cap of 443 billion yen, so it’s too big to go unnoticed. We would expect institutions and retail investors to own a portion of the company. Our analysis of company ownership, below, shows that institutions are visible on the share register. We can zoom in on the different property groups, to find out more about Biocon.

Discover our latest analysis for Biocon

Distribution of the NSEI property: BIOCON December 11, 2021

What does institutional ownership tell us about Biocon?

Institutional investors generally compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.

We can see that Biocon has institutional investors; and they own a good portion of the company’s stock. 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 shares quickly. This risk is higher in a company without a history of growth. You can see Biocon’s historical revenue and revenue below, but keep in mind that there is always more to tell.

profit and revenue growth
NSEI: BIOCON Profits and Revenue Growth December 11, 2021

We note that the hedge funds do not have a significant investment in Biocon. From our data, we infer that the largest shareholder is Kiran Mazumdar-Shaw (who also holds the title of Top Key Executive) with 40% of the shares outstanding. It’s generally considered a good sign when insiders own a significant number of company shares, and in this case, we’re happy to see a company insider playing the role of a key stakeholder. For context, the second largest shareholder owns around 21% of the outstanding shares, followed by a 4.3% stake by the third largest shareholder.

After digging a little deeper, we found that the top 2 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. There are a reasonable number of analysts covering the stock, so it can be helpful to know their overall vision for the future.

Biocon insider property

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Insider ownership is positive when it indicates that executives think like the real owners of the company. However, strong insider ownership can also confer immense power on a small group within the company. This can be negative in some circumstances.

It appears that insiders own more than half of the shares of Biocon Limited. It gives them a lot of power. Considering that it has a market capitalization of 443 billion yen, this means that insiders are worth a whopping 278 billion yen of shares in their name. Most would be happy to see the board invest alongside them. You might want to find out if they bought or sold.

General public property

The general public, generally individual investors, own 16% of Biocon’s capital. While this group cannot necessarily take the lead, it can certainly have a real influence on how the business is run.

Next steps:

It’s always worth thinking about the different groups that own shares in a company. But to understand Biocon better, there are many other factors to consider. For example, we have identified 1 warning sign for Biocon that you need to be aware of.

Ultimately the future is the most important. You can access this free analyst forecast report for the company.

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 any stock 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.

Comments are closed.