What does the ownership structure of Cipla Limited (NSE: CIPLA) look like?

If you want to know who really controls Cipla Limited (NSE: CIPLA) then you will need to look at the makeup of its share register. Large companies usually have institutions as shareholders, and we usually see insiders holding shares in smaller companies. I generally like to see some degree of insider ownership, even if it’s just a little. As Nassim Nicholas Taleb said, “Don’t tell me what you think, tell me what you have in your wallet.

Cipla is a pretty big company. It has a market cap of ₹ 722b. Normally, institutions would own a significant share of a company of this size. Looking at our data on ownership groups (below), it appears that institutions are visible on the share register. Let’s take a closer look at what different types of shareholders can tell us about Cipla.

See our latest review for Cipla

Distribution of the NSEI property: CIPLA 23 November 2021

What does institutional ownership tell us about Cipla?

Institutional investors generally compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.

As you can see, institutional investors have a significant stake in Cipla. This suggests some credibility among professional investors. But we cannot rely on this fact alone because institutions sometimes make bad investments, like everyone else. When several institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes awry, several parties may compete with each other to sell shares quickly. This risk is higher in a company without a history of growth. You can see Cipla’s historical income and earnings below, but keep in mind that there is always more to tell.

profit and revenue growth
NSEI: CIPLA Earnings and Revenue Growth 23 November 2021

We note that the hedge funds do not have a significant investment in Cipla. Our data shows that Yusuf Hamied is the largest shareholder with 20% of the shares outstanding. With 5.7% and 4.3% of shares in circulation, respectively, Sophie Ahmed and Mustafa Hamied are the second and third shareholders. Mustafa Hamied, who is the third shareholder, also holds the title of vice-chairman.

A closer look at our ownership figures suggests that the top 11 shareholders have a combined 50% ownership, implying that no shareholder has a majority.

While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand the expected performance of a stock. Many analysts cover the stock, so it can be interesting to see what they are forecasting as well.

Cipla insider ownership

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company manages the company, but the CEO will report to the board of directors, even if he is a member of the board.

I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own a reasonable proportion of Cipla Limited. It has a market capitalization of just 722 billion yen and insiders have shares worth 261 billion yen in their name. It is quite important. Most would say it shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if these insiders have bought or sold.

General public property

With a 30% stake, the general public, made up mainly of individual investors, has some influence over Cipla. While this property size may not be enough to influence a policy decision in their favor, they can still have a collective impact on company policies.

Next steps:

While it is worth considering the different groups that own a business, there are other factors that are even more important.

I always like to check a history of revenue growth. You can also, by accessing this free table of historical income and earnings in this detailed graphic.

If you’d rather find out what analysts are predicting in terms of future growth, don’t miss this free analyst forecast report.

NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.

Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.


Source link

Comments are closed.