If you want to know who actually controls Somany Ceramics Limited (NSE: SOMANYCERA), you will need to look at the composition of its share register. The group with the largest number of shares in the company, around 37% to be precise, are private companies. In other words, the group faces the maximum upside potential (or downside risk).

While insiders, who own 24% of the shares, were not spared by the ₹3.6 billion drop in market capitalization last week, private companies as a group suffered the maximum losses

Let’s take a closer look at what different types of shareholders can tell us about Somany Ceramics.

See our latest analysis for Somany Ceramics

What does institutional ownership tell us about Somany Ceramics?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.

As you can see, institutional investors hold a sizeable share of Somany Ceramics. This suggests some credibility with professional investors. But we cannot rely solely on this fact since institutions sometimes make bad investments, like everyone else. 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 Somany Ceramics’ revenue and historical earnings below, but keep in mind there’s always more to tell.

We note that hedge funds have no significant investment in Somany Ceramics. Shakthi Family Trust is currently the largest shareholder, with 24% of the outstanding shares. Abhishek Somany is the second largest shareholder with 15% of the common shares and Srijan Family Trust owns around 10% of the company’s shares. Abhishek Somany, who is the second largest shareholder, also holds the title of co-CEO. Additionally, CEO Shreekant Somany owns 0.6% of the company’s shares.

Looking further, we found that 55% of the shares are held by the top 4 shareholders. In other words, these shareholders have a say in the decisions of 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 feelings of the analyst. A number of analysts cover the stock, so you can look at growth forecasts quite easily.

Insider Property of Somany Ceramics

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.

Our information suggests that insiders hold a significant stake in Somany Ceramics Limited. Insiders hold ₹5.6 billion worth of shares in the ₹24 billion company. This may suggest that the founders still own a lot of shares. You can click here to see if they bought or sold.

General public property

With a 21% stake, the general public, consisting mainly of individual investors, has some influence over Somany Ceramics. This size of ownership, although considerable, may not be sufficient to change company policy if the decision is not in line with other large shareholders.

Private Company Ownership

It seems that private companies hold 37% of the shares of Somany Ceramics. It might be worth exploring this further. If related parties, such as insiders, have an interest in any of these private companies, this must be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next steps:

It is always useful to think about the different groups that own shares in a company. But to better understand Somany Ceramics, we need to consider many other factors. For example, we found 2 warning signs for Somany Ceramics which you should be aware of before investing here.

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.

Feedback on this article? Concerned about content? Get in touch with us directly. You can also email the editorial team (at) Simplywallst.com.

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.