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Sterling and Wilson Renewable Energy Limited’s (NSE:SWSOLAR) biggest owners are public companies who got richer after stock soared 8.6% last week


A look at the shareholders of Sterling and Wilson Renewable Energy Limited (NSE:SWSOLAR) can tell us which group is most powerful. The group holding the most number of shares in the company, around 40% to be precise, is public companies. 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 ₹4.8b last week.

In the chart below, we zoom in on the different ownership groups of Sterling and Wilson Renewable Energy.

Check out our latest analysis for Sterling and Wilson Renewable Energy

NSEI:SWSOLAR Ownership Breakdown September 22nd 2022

What Does The Institutional Ownership Tell Us About Sterling and Wilson Renewable Energy?

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.

Sterling and Wilson Renewable Energy already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. When multiple institutions own a stock, there’s always a risk that they are in a ‘crowded trade’. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Sterling and Wilson Renewable Energy’s historic earnings and revenue below, but keep in mind there’s always more to the story.

earnings-and-revenue-growth
NSEI:SWSOLAR Earnings and Revenue Growth September 22nd 2022

Hedge funds don’t have many shares in Sterling and Wilson Renewable Energy. Reliance Industries Limited is currently the largest shareholder, with 40% of shares outstanding. Shapoorji Pallonji And Company Private Limited is the second largest shareholder owning 24% of common stock, and Khurshed Daruvala holds about 5.4% of the company stock. Khurshed Daruvala, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. As far as we can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Sterling and Wilson Renewable Energy

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.

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.

We can see that insiders own shares in Sterling and Wilson Renewable Energy Limited. In their own names, insiders own ₹4.2b worth of stock in the ₹61b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 16% stake in Sterling and Wilson Renewable Energy. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 24%, of the shares on issue. It’s hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Public Company Ownership

We can see that public companies hold 40% of the Sterling and Wilson Renewable Energy shares on issue. It’s hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it’s worth watching this space for changes in ownership.

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. For example, we’ve discovered 3 warning signs for Sterling and Wilson Renewable Energy (2 are a bit concerning!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.

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.

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