Public companies are Nahar Spinning Mills Limited’s (NSE:NAHARSPING) biggest owners and were rewarded after market cap rose by ₹2.0b last week

To get a sense of who is truly in control of Nahar Spinning Mills Limited (NSE:NAHARSPING), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are public companies with 64% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, public companies benefitted the most after the company’s market cap rose by ₹2.0b last week.

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

View our latest analysis for Nahar Spinning Mills

What Does The Lack Of Institutional Ownership Tell Us About Nahar Spinning Mills?

Small companies that are not very actively traded often lack institutional investors, but it’s less common to see large companies without them.

There are multiple explanations for why institutions don’t own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. On the other hand, it’s always possible that professional investors are avoiding a company because they don’t think it’s the best place for their money. Nahar Spinning Mills’ earnings and revenue track record (below) may not be compelling to institutional investors — or they simply might not have looked at the business closely.

We note that hedge funds don’t have a meaningful investment in Nahar Spinning Mills. Nahar Capital and Financial Services Limited is currently the largest shareholder, with 45% of shares outstanding. In comparison, the second and third largest shareholders hold about 19% and 4.9% of the stock.

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.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock’s expected performance. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Nahar Spinning Mills

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 some shares in Nahar Spinning Mills Limited. As individuals, the insiders collectively own ₹1.1b worth of the ₹13b company. This shows at least some alignment, but we usually like to see larger insider holdings. 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 22% stake in Nahar Spinning Mills. 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.

Public Company Ownership

It appears to us that public companies own 64% of Nahar Spinning Mills. We can’t be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We’ve spotted 4 warning signs for Nahar Spinning Mills you should be aware of.

If you would prefer check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, backed by strong financial data.

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.