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A look at the shareholders of UltraTech Cement Limited (NSE:ULTRACEMCO) can tell us which group is most powerful. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that have been privatized tend to have low insider ownership.
With a market capitalization of ₹1.1t, UltraTech Cement is rather large. We'd expect to see institutional investors on the register. Companies of this size are usually well known to retail investors, too. Taking a look at our data on the ownership groups (below), it's seems that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about ULTRACEMCO.
Check out our latest analysis for UltraTech Cement
What Does The Institutional Ownership Tell Us About UltraTech Cement?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
UltraTech Cement already has institutions on the share registry. Indeed, they own 20% of 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of UltraTech Cement, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don't have many shares in UltraTech Cement. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of UltraTech Cement
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our most recent data indicates that insiders own less than 1% of UltraTech Cement Limited. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own ₹672m of stock. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.