Could the ownership structure of Nahar Poly Films Limited (NSE:NAHARPOLY) tell us anything useful?
Every investor in Nahar Poly Films Limited (NSE:NAHARPOLY) should know the most powerful shareholder groups. Institutions often own shares in more established companies, while it is not uncommon to see insiders owning a good number of smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, “Don’t tell me what you think, tell me what you have in your wallet”.
Nahar Poly Films is not a big company by global standards. It has a market capitalization of ₹8.8 billion, which means it would not get the attention of many institutional investors. Looking at our data on ownership groups (below), it appears that institutions do not own shares in the company. Let’s take a closer look at what different types of shareholders can tell us about Nahar Poly Films.
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What does the lack of institutional ownership tell us about Nahar Poly Films?
Small companies that are not very actively traded often lack institutional investors, but it is less common to see large companies without them.
There are several explanations why institutions do not own stocks. The most common is that the business is too small relative to the funds under management, so the institution doesn’t bother to look closely at the business. On the other hand, it’s always possible for professional investors to avoid a company because they think it’s not the best place for their money. Nahar Poly Films may not have the kind of track record institutions look for, or maybe they just haven’t studied the company closely.
Hedge funds do not have many shares in Nahar Poly Films. The company’s largest shareholder is Nahar Capital and Financial Services Limited with a 49% stake. For context, the second shareholder owns approximately 18% of the outstanding shares, followed by a 3.2% ownership by the third shareholder.
To make our study more interesting, we found that the top 2 shareholders hold a majority stake in the company, which means they are powerful enough to influence company decisions.
Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be obtained by studying the sentiments of analysts. Our information suggests there is no analyst coverage of the stock, so it is likely little known.
Nahar Poly Films Insider Ownership
The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.
Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
We may report that insiders hold shares in Nahar Poly Films Limited. In their own name, insiders hold ₹496 million worth of shares in the ₹8.8 billion company. This shows at least some alignment, but we generally like to see larger insider holdings. You can click here to see if these insiders have been buying or selling.
General public property
With a 22% stake, the general public, consisting mainly of individual investors, has some influence over Nahar Poly Films. While this size of ownership may not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.
Private Company Ownership
Our data indicates that private companies own 3.2% of the company’s shares. Private companies can be related parties. Sometimes insiders have an interest in a public company through an equity stake in a private company, rather than in their own capacity as an individual. Although it is difficult to draw general conclusions, it should be noted that this is an area for further research.
Ownership of a public company
State-owned companies currently own 67% of the shares of Nahar Poly Films. We cannot be sure, but it is quite possible that it is a strategic issue. Businesses can be similar or work together.
It is always useful to think about the different groups that own shares in a company. But to better understand Nahar Poly Films, we need to consider many other factors. Consider the risks, for example. Every business has them, and we’ve spotted 1 warning sign for Nahar Poly Films you should know.
Sure this may not be the best stock to buy. Therefore, you may want to see our free set of interesting prospects benefiting from a favorable financial situation.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.