Insiders remain on top despite recent sales, own 74% of Motilal Oswal Financial Services Limited (NSE:MOTILALOFS)

If you want to know who really controls Motilal Oswal Financial Services Limited (NSE:MOTILALOFS), then you’ll have to look at the makeup of its share registry. With 74% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Even though insiders have sold shares recently, the group owns the most numbers of shares in the company and as a result benefitted the most after market cap rose ₹6.0b last week.

In the chart below, we zoom in on the different ownership groups of Motilal Oswal Financial Services.

View our latest analysis for Motilal Oswal Financial Services

What Does The Institutional Ownership Tell Us About Motilal Oswal Financial Services?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Motilal Oswal Financial Services already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at Motilal Oswal Financial Services’ earnings history below. Of course, the future is what really matters.

We note that hedge funds don’t have a meaningful investment in Motilal Oswal Financial Services. The company’s CEO Motilal Oswal is the largest shareholder with 34% of shares outstanding. In comparison, the second and third largest shareholders hold about 32% and 5.3% of the stock. Interestingly, the second-largest shareholder, Raamdeo Agrawal is also Top Key Executive, again, pointing towards strong insider ownership amongst the company’s top shareholders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company’s shares, implying that they have considerable power to influence the company’s decisions.

Researching institutional ownership is a good way to gauge and filter a stock’s expected performance. The same can be achieved by studying analyst sentiments. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Motilal Oswal Financial Services

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own the majority of Motilal Oswal Financial Services Limited. This means they can collectively make decisions for the company. Insiders own ₹81b worth of shares in the ₹110b company. That’s extraordinary! Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public– including retail investors — own 14% stake in the company, and hence can’t easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

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 Motilal Oswal Financial Services is showing 4 warning signs in our investment analysis , and 2 of those are a bit unpleasant…

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 calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an 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 account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.