While institutions invested in Praj Industries Limited (NSE:PRAJIND) benefited from last week's 4.5% gain, individual investors stood to gain the most

Key Insights

• Praj Industries' significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 51% of the business is held by the top 10 shareholders
• Insiders have been selling lately

To get a sense of who is truly in control of Praj Industries Limited (NSE:PRAJIND), it is important to understand the ownership structure of the business. With 35% stake, individual investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While individual investors were the group that benefitted the most from last week’s ₹6.1b market cap gain, institutions too had a 32% share in those profits.

Let's take a closer look to see what the different types of shareholders can tell us about Praj Industries.

See our latest analysis for Praj Industries

What Does The Institutional Ownership Tell Us About Praj Industries?

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 Praj Industries does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Praj Industries' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Praj Industries. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Praj Industries' case, its Top Key Executive, Pramod Chaudhari, is the largest shareholder, holding 21% of shares outstanding. Parimal Chaudhari is the second largest shareholder owning 7.8% of common stock, and Canara Robeco Asset Management Company Limited holds about 4.5% of the company stock.

On further inspection, we found that more than half the company's shares are owned by the top 10 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 Praj Industries

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 insiders maintain a significant holding in Praj Industries Limited. It has a market capitalization of just ₹141b, and insiders have ₹41b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 35% 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.

Private Company Ownership

Our data indicates that Private Companies hold 3.9%, of the company's shares. 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.

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. To that end, you should be aware of the 2 warning signs we've spotted with Praj Industries .

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.

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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.