The share price of Tata Power Company Limited (NSE:TATAPOWER) fell 5.0% last week; Private companies will not be happy | Daily News Byte

Every investor in Tata Power Limited (NSE:TATAPOWER) should be aware of the most powerful group of shareholders. And the group that holds the largest piece of the pie is private companies with 45%. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, private companies endured the biggest losses as the stock fell 5.0%.

Let’s take a closer look to see what different types of shareholders can tell us about Tata Power.

However if you want to see where OPPORTUNITIES AND RISKS IN THE INDUSTRY OF TATAPOWERYou can check out our analysis of the IN Electric Utilities industry.

What does institutional ownership tell us about Tata Power?

Many institutions measure their performance against an index that approximates the local market. So they tend to pay more attention to companies that are included in major indexes.

We can see that Tata Power has institutional investors; And they hold a good share of the company. This indicates some credibility among professional investors. But we can’t rely on that fact alone since institutions make bad investments sometimes, just like everyone else does. When many institutions own a stock, there is always the risk that they are in a ‘crowded trade’. When the trade goes wrong, many parties may compete to sell the stock quickly. This risk is higher in companies that do not have a history of growth. You can see Tata Power’s historical revenue and earnings below, but remember there’s always more to come.

Tata Power is not owned by hedge funds. Currently, Tata Sons Private Limited is the largest shareholder of the company with 45% of the outstanding shares. With 6.7% and 1.7% of shares outstanding respectively, Life Insurance Company of India, Asset Management Arm and The Vanguard Group, Inc. are the second and third largest shareholders.

After further exploration, we found that the top 2 shareholders have accumulated more than half of the company’s shares, which means that they have a lot of power to influence the company’s decisions.

While studying institutional ownership for a company can add value to your research, it’s also good practice to research analyst recommendations to gain a deeper understanding of a stock’s expected performance. There are a lot of analysts covering the stock, so it might be worth seeing what they predict, too.

Insider ownership of Tata Power

The definition of a domestic company can be subjective and vary between jurisdictions. Our information reflects the insiders, holding the board members at least. The answer of the management of the company to the board and the latter should represent the interests of the shareholders. In particular, sometimes top managers are on their own boards.

Insider ownership is positive when it signals that leaders are thinking like true owners of the company. However, high insider ownership can also give great power to small groups within the company. This can be negative in some situations.

Our information shows that Tata Energy Company Limited is the owner of Under 1% of the company. However, it is possible that insiders may be interested indirectly through more complex structures. Because of its large size, we would not expect insiders to own large stocks. Collectively, they own ₹159m in stock. In such a situation, it can be very interesting to see what those insiders get. Buying or selling.

Common public ownership

With 31% ownership, the general public, mostly made up of individual investors, has a greater degree of sway over Tata Power. The size of this ownership, while considered, may not be enough to change the company’s policy if the decision is not in line with other large shareholders.

Private company ownership

It seems that the private company owns 45%, of Tata Power stock. Private companies may be related parties. Sometimes insiders are interested in public companies through holdings in private companies, rather than in their own capacity as individuals. While it is difficult to draw broad conclusions about stroke, it should be an area for further research.

Next step:

I find it very interesting to see who really owns the company. But to have a real understanding, we need to consider other data, too. To do this, you should learn about 2 warning signs We met with Tata Power (including 1 which is a little story).

But in the end It is the future, not the past, that will determine how this business owner will do well. Therefore, we think it is worth looking at this free report that shows how analysts are predicting a bright future.

NB: The figures in this article are calculated using data from the last twelve months, 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 full year annual report numbers.

Have an opinion on this article? Worried about content? Can be contacted with us directly. Alternatively, email the editorial team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methods and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any securities, and does not take into account your objectives, or your financial situation. We aim to bring you long-term focused analysis based on fundamental data. Please note that our analysis may not factor in company postings that are sensitive to the latest price or quality materials. Only Wall St has no position in any of the stocks mentioned.