With 43% ownership in Pidilite Industries Limited (NSE:PIDILITIND), insiders

Key Insights

• Pidilite Industries’ significant insider ownership suggests inherent interests in company’s expansion
• A total of 10 investors have a majority stake in the company with 52% ownership
• Recent sales by insiders

If you want to know who really controls Pidilite Industries Limited (NSE:PIDILITIND), then you’ll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 43% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And insiders own the top position in the company’s share registry despite recent sales.

Let’s take a closer look to see what the different types of shareholders can tell us about Pidilite Industries.

See our latest analysis for Pidilite Industries

What Does The 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 companies to have some institutions on the register, especially if they are growing.

We can see that Pidilite Industries does have institutional investors; and they hold a good portion of the company’s stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Pidilite Industries, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don’t have many shares in Pidilite Industries. Narendrakumar Parekh is currently the largest shareholder, with 11% of shares outstanding. Madhukar Parekh is the second largest shareholder owning 10% of common stock, and Mrudula Parekh holds about 8.0% of the company stock. Madhukar Parekh, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.

On further inspection, we found that more than half the company’s shares are owned by the top 10 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Pidilite Industries

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own a reasonable proportion of Pidilite Industries Limited. It is very interesting to see that insiders have a meaningful ₹554b stake in this ₹1.3t business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 23% stake in Pidilite Industries. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 19%, of the company’s shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Pidilite Industries is showing 2 warning signs in our investment analysis , you should know about…

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

NB: Figures in this article are…