Ion Exchange (India) Limited (NSE:IONEXCHANG) surges 6.7%; individual investors who own 43% shares profited along with insiders

Simply Wall St · 10/19 02:15

Key Insights

  • Significant control over Ion Exchange (India) by individual investors implies that the general public has more power to influence management and governance-related decisions
  • A total of 16 investors have a majority stake in the company with 50% ownership
  • Insiders have sold recently

A look at the shareholders of Ion Exchange (India) Limited (NSE:IONEXCHANG) can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 43% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While individual investors were the group that benefitted the most from last week’s ₹5.2b market cap gain, insiders 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 Ion Exchange (India).

View our latest analysis for Ion Exchange (India)

ownership-breakdown
NSEI:IONEXCHANG Ownership Breakdown October 19th 2024

What Does The Institutional Ownership Tell Us About Ion Exchange (India)?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Ion Exchange (India) 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 Ion Exchange (India)'s earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NSEI:IONEXCHANG Earnings and Revenue Growth October 19th 2024

Hedge funds don't have many shares in Ion Exchange (India). From our data, we infer that the largest shareholder is Rajesh Sharma (who also holds the title of Top Key Executive) with 7.6% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. In comparison, the second and third largest shareholders hold about 6.3% and 5.6% of the stock. Interestingly, the third-largest shareholder, Mahabir Patni is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 16 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Ion Exchange (India)

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 maintain a significant holding in Ion Exchange (India) Limited. It has a market capitalization of just ₹83b, and insiders have ₹26b worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 43% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Ion Exchange (India). This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 4.0%, of the shares on issue. 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. Case in point: We've spotted 1 warning sign for Ion Exchange (India) you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.