Insiders still own 63% of Alkyl Amines Chemicals Limited (NSE:ALKYLAMINE) despite recent sales

Simply Wall St · 10/15 00:07

Key Insights

  • Insiders appear to have a vested interest in Alkyl Amines Chemicals' growth, as seen by their sizeable ownership
  • Yogesh Kothari owns 58% of the company
  • Insiders have sold recently

To get a sense of who is truly in control of Alkyl Amines Chemicals Limited (NSE:ALKYLAMINE), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 63% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Even though insiders have sold shares recently, the group owns the most numbers of shares in the company and as a result benefitted the most after market cap rose ₹7.0b last week.

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

Check out our latest analysis for Alkyl Amines Chemicals

ownership-breakdown
NSEI:ALKYLAMINE Ownership Breakdown October 15th 2024

What Does The Institutional Ownership Tell Us About Alkyl Amines Chemicals?

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.

Institutions have a very small stake in Alkyl Amines Chemicals. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

earnings-and-revenue-growth
NSEI:ALKYLAMINE Earnings and Revenue Growth October 15th 2024

We note that hedge funds don't have a meaningful investment in Alkyl Amines Chemicals. The company's CEO Yogesh Kothari is the largest shareholder with 58% of shares outstanding. This implies that they possess majority interests and have significant control over the company. Investors usually consider it a good sign when the company leadership has such a significant stake, as this is widely perceived to increase the chance that the management will act in the best interests of the company. In comparison, the second and third largest shareholders hold about 3.8% and 3.7% of the stock.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Alkyl Amines Chemicals

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 information suggests that insiders own more than half of Alkyl Amines Chemicals Limited. This gives them effective control of the company. That means insiders have a very meaningful ₹75b stake in this ₹119b business. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 23% 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 9.1%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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 1 warning sign we've spotted with Alkyl Amines Chemicals .

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.