Salasar Techno Engineering Limited’s (NSE:SALASAR) 15% gain last week benefited both private companies who own 40% as well as insiders – simplywall.st
Key Insights
To get a sense of who is truly in control of Salasar Techno Engineering Limited (NSE:SALASAR), it is important to understand the ownership structure of the business. We can see that private companies own the lion’s share in the company with 40% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
While private companies were the group that reaped the most benefits after last week’s 15% price gain, insiders also received a 39% cut.
In the chart below, we zoom in on the different ownership groups of Salasar Techno Engineering.
Check out our latest analysis for Salasar Techno Engineering
What Does The Institutional Ownership Tell Us About Salasar Techno Engineering?
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.
Salasar Techno Engineering already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Salasar Techno Engineering’s earnings history below. Of course, the future is what really matters.
We note that hedge funds don’t have a meaningful investment in Salasar Techno Engineering. Hill View Infrabuild Ltd is currently the company’s largest shareholder with 18% of shares outstanding. With 11% and 8.2% of the shares outstanding respectively, Alok Kumar and Shalabh Agarwal are the second and third largest shareholders. Note that the second and third-largest shareholders are also Co-Chief Executive Officer and Member of the Board of Directors, respectively, meaning that the company’s top shareholders are insiders.
To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company’s decision-making.
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. As far as we can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Salasar Techno Engineering
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.
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 Salasar Techno Engineering Limited. Insiders own ₹7.2b worth of shares in the ₹18b company. 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 15% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Salasar Techno Engineering. 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 40%, 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:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we’ve spotted with Salasar Techno Engineering .
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
Valuation is complex, but we’re helping make it simple.
Find out whether Salasar Techno Engineering is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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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.
