To get a sense of who is truly in control of TD Power Systems Limited (NSE:TDPOWERSYS), it is important to understand the ownership structure of the business. With 40% stake, institutions possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
No shareholder likes losing money on their investments, especially institutional investors who saw their holdings drop 10% in value last week. However, the 60% one-year return to shareholders might have softened the blow. But they would probably be wary of future losses.
Let's take a closer look to see what the different types of shareholders can tell us about TD Power Systems.
View our latest analysis for TD Power Systems
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 TD Power Systems 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of TD Power Systems, (below). Of course, keep in mind that there are other factors to consider, too.
TD Power Systems is not owned by hedge funds. Saphire Finman Services Private Limited is currently the largest shareholder, with 13% of shares outstanding. With 8.3% and 6.6% of the shares outstanding respectively, Nikhil Kumar and Nippon Life India Asset Management Limited are the second and third largest shareholders. Nikhil Kumar, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.
We also observed that the top 10 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
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 TD Power Systems Limited. Insiders own ₹17b worth of shares in the ₹109b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
The general public, who are usually individual investors, hold a 31% stake in TD Power Systems. 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.
We can see that Private Companies own 13%, 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.
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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for TD Power Systems (of which 1 is significant!) you should know about.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.
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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