What type of shareholders make up the share register of Kirloskar Oil Engines Limited (NSE:KIRLOSENG)?
If you want to know who actually controls Kirloskar Oil Engines Limited (NSE: KIRLOSENG), then you will need to look at the composition of its share register. Insiders often own a large portion of younger, smaller companies, while larger companies tend to have institutions as shareholders. 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”.
Kirloskar Oil Engines is not a big company by world standards. It has a market cap of ₹22 billion, which means it wouldn’t get the attention of many institutional investors. In the chart below, we can see that institutional investors have bought the company. Let’s dig deeper into each type of owner to learn more about Kirloskar oil engines.
See our latest analysis for Kirloskar oil engines
What does institutional ownership tell us about Kirloskar oil engines?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
Kirloskar Oil Engines already has institutions registered in the share register. Indeed, they hold a respectable stake in the company. This may indicate that the company has some degree of credibility in the investment community. However, it is best to be wary of relying on the so-called validation that accompanies institutional investors. They are also sometimes wrong. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Kirloskar Oil Engines’ historical revenue and earnings below, but keep in mind there’s always more to tell.
We note that hedge funds have no significant investment in Kirloskar Oil Engines. Our data suggests that Atul Kirloskar, who is also the company’s Top Key Executive, owns the most shares at 14%. When an insider owns a significant amount of stock in a company, investors view it as a positive sign, as it suggests that insiders are willing to tie their wealth to the future of the company. Meanwhile, the second and third largest shareholders hold 12% and 9.1% of the outstanding shares respectively.
Our research also shed light on the fact that approximately 53% of the company is controlled by the top 5 shareholders, suggesting that these owners wield significant influence over the company.
Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be obtained by studying the sentiments of analysts. Although there is some analyst coverage, the company is probably not widely covered. So it could attract more attention, on the track.
Insider Ownership of Kirloskar Oil Engines
The definition of an insider may differ slightly from country to country, but board members still matter. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.
Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
It appears that insiders own more than half of the shares of Kirloskar Oil Engines Limited. It gives them a lot of power. So they have a ₹12 billion stake in this ₹22 billion business. Most would be delighted to see the board investing alongside them. You might want to find out (free) whether they bought or sold.
General public property
With a 15% stake, the general public, consisting mainly of individual investors, has some influence over Kirloskar Oil Engines. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.
Ownership of a public company
We can see that public companies hold 5.7% of Kirloskar Oil Engines shares on issuance. It’s hard to say for sure, but it suggests they have intertwined business interests. This could be a strategic stake, so it’s worth monitoring this space for ownership changes.
It is always useful to think about the different groups that own shares in a company. But to better understand Kirloskar oil engines, we need to consider many other factors. Example: we have identified 2 warning signs for Kirloskar oil engines you should be aware.
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 using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.