To get an idea of who actually controls Polyplex Corporation Limited (NSE: POLYPLEX), it is important to understand the ownership structure of the company. We can see that private companies hold the lion’s share of the company with 49% ownership. In other words, the group is likely to gain the most (or lose the most) from its investment in the business.
As a result, private companies collectively achieved the highest score last week, with the company reaching a market capitalization of ₹70 billion after a 7.0% gain in the stock.
Let’s dive deeper into each type of Polyplex owner, starting with the table below.
See our latest analysis for Polyplex
What does institutional ownership tell us about Polyplex?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.
As you can see, institutional investors hold a sizeable share of Polyplex. This may indicate that the company has some degree of credibility in the investment community. However, it is best to be wary of relying on the so-called validation that accompanies institutional investors. They are also sometimes wrong. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Polyplex’s revenue and historical revenue below, but keep in mind there’s always more to tell.
We note that hedge funds have no significant investment in Polyplex. Mahalaxmi Trading & Investment Co. Ltd. is currently the largest shareholder of the company with 24% of the outstanding shares. Secure Investments Ltd is the second largest shareholder with 18% of the common shares and Sanjiv Sarita Consulting Private Limited owns about 4.4% of the company’s shares.
Looking further, we found that 51% of the shares are held by the top 5 shareholders. In other words, these shareholders have a say in the decisions of the company.
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 a stock’s expected performance. Although there is some analyst coverage, the company is probably not widely covered. So it could attract more attention, on the track.
Polyplex 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 runs the company, but the CEO will answer to the board of directors, even if he is a member of it.
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 of Polyplex Corporation Limited. It has a market cap of just ₹70 billion, and insiders have ₹5.2 billion worth of shares, in their own name. Some would say this shows the alignment of interests between shareholders and the board. But it might be worth checking to see if these insiders have sold.
General public property
The general public, who are usually individual investors, hold a 35% stake in Polyplex. This size of ownership, although considerable, may not be sufficient to change company policy if the decision is not in line with other large shareholders.
Private Company Ownership
We can see that private companies hold 49% of the shares issued. It might be worth exploring this further. If related parties, such as insiders, have an interest in any of these private companies, this should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
While it is worth considering the different groups that own a business, there are other, even more important factors. Take for example the ubiquitous specter of investment risk. We have identified 2 warning signs with Polyplex and understanding them should be part of your investment process.
If you prefer to 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 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.