Reliance Industries Limited's (NSE:RELIANCE) top owners are private companies with 48% stake, while 26% is held by institutions

Key Insights

• Reliance Industries' significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 8 shareholders own 52% of the company
• Institutional ownership in Reliance Industries is 26%

If you want to know who really controls Reliance Industries Limited (NSE:RELIANCE), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private companies with 48% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Meanwhile, institutions make up 26% of the company’s shareholders. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.

In the chart below, we zoom in on the different ownership groups of Reliance Industries.

View our latest analysis for Reliance Industries

What Does The Institutional Ownership Tell Us About Reliance Industries?

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.

We can see that Reliance Industries does have institutional investors; and they hold a good portion of the company's stock. 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 Reliance Industries' earnings history below. Of course, the future is what really matters.

Reliance Industries is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Srichakra Commercials Llp with 11% of shares outstanding. The second and third largest shareholders are Devarshi Commercials LLP and Tattvam Enterprises Llp, with an equal amount of shares to their name at 8.1%. Additionally, the company's CEO Mukesh Ambani directly holds 0.7% of the total shares outstanding.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 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 Reliance Industries

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.

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 data suggests that insiders own under 1% of Reliance Industries Limited in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. 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 ₹195b 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

With a 22% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Reliance Industries. 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

We can see that Private Companies own 48%, of the shares on issue. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Reliance Industries , and understanding them should be part of your investment process.

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.