Key Insights
- Significant control over Titan by general public implies that this group likely has considerable sway over management and governance-related decisions
- The top 3 shareholders own 53% of the company
- own 19% of Titan
To get a sense of who is truly in control of Titan Company Limited (NSE:TITAN), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 29% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
As a result, individual investors as a group endured the highest losses last week after market cap fell by ₹72b.
In the chart below, we zoom in on the different ownership groups of Titan.
See our latest analysis for Titan
What Does The Institutional Ownership Tell Us About Titan?
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.
We can see that Titan does have institutional investors; and they hold a good portion of the company’s stock. This suggests some credibility amongst professional investors. But we can’t rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Titan, (below). Of course, keep in mind that there are other factors to consider, too.
Titan is not owned by hedge funds. Tamil Nadu Industrial Development Corporation Limited is currently the largest shareholder, with 28% of shares outstanding. In comparison, the second and third largest shareholders hold about 21% and 3.3% of the stock.
After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company’s shares, implying that they have considerable power to influence the company’s decisions.
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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Titan
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our information suggests that Titan Company Limited insiders own under 1% of the company. However, it’s possible that insiders might have an indirect interest through a more complex structure. As it is a large company, we’d only expect insiders to own a small percentage of it. But it’s worth noting that they own ₹476m worth of shares. Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 29% stake in Titan. 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.
Private Company Ownership
It seems that Private Companies own 21%, of the Titan stock. 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:
It’s always worth thinking about the different groups who own shares in a company. But to understand Titan better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we’ve spotted with Titan .
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.
Valuation is complex, but we’re helping make it simple.
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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.
