Every investor in Godrej Properties Limited (NSE:GODREJPROP) should be aware of the most powerful shareholder groups. We can see that public companies own the lion's share in the company with 45% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Institutions, on the other hand, account for 21% of the company's stockholders. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.
Let's delve deeper into each type of owner of Godrej Properties, beginning with the chart below.
See our latest analysis for Godrej Properties
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.
Godrej Properties 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 Godrej Properties' historic earnings and revenue below, but keep in mind there's always more to the story.
Godrej Properties is not owned by hedge funds. The company's largest shareholder is Godrej Industries Limited, with ownership of 45%. GIC Private Limited is the second largest shareholder owning 5.5% of common stock, and Godrej & Boyce Manufacturing Company Limited holds about 3.5% of the company stock.
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.
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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our data suggests that insiders own under 1% of Godrej Properties Limited in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own ₹4.3b 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.
The general public, who are usually individual investors, hold a 19% stake in Godrej Properties. 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.
Our data indicates that Private Companies hold 7.6%, 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.
We can see that public companies hold 45% of the Godrej Properties 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.
It's always worth thinking about the different groups who own shares in a company. But to understand Godrej Properties better, we need to consider many other factors. For example, we've discovered 1 warning sign for Godrej Properties that you should be aware of before investing here.
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.