In This Article:
In this article, I will take a quick look at Ruchi Infrastructure Limited’s (NSEI:RUCHINFRA) recent ownership structure – an unconventional investing subject, but an important one. Ownership structure of a company has been found to affect share performance over time. Since the effect of an active institutional investor with a similar ownership as a passive pension-fund can be vastly different on a company’s corporate governance and accountability of shareholders, investors should take a closer look at RUCHINFRA’s shareholder registry.
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Institutional Ownership
Institutions account for 12.96% of RUCHINFRA’s outstanding shares, a significant enough holding to move stock prices if they start buying and selling in large quantities, especially when there are relatively small amounts of shares available on the market to trade. Although RUCHINFRA has a high institutional ownership, such stock moves, in the short-term, are more commonly linked to a particular type of active institutional investors – hedge funds. For RUCHINFRA shareholders, the potential of this type of share price volatility shouldn’t be as concerning as hedge fund ownership is is not significant,indicating few chances of such sudden price moves. While that hardly seems concerning, I will explore further into RUCHINFRA’s ownership type to find out how it can affect the company’s investment profile.
Insider Ownership
Insiders form another group of important ownership types as they manage the company’s operations and decide the best use of capital. Insider ownership has been linked to better alignment between management and shareholders. RUCHINFRA insiders hold a significant stake of 24.71% in the company. This level of insider ownership has been found to have a negative impact on companies with consistently low PE ratios (underperformers), while it has been positive in the case of high PE ratio firms (outperformers). It may be interesting to take a look at what company insiders have been doing with their holdings lately. While insider buying is possibly a sign of a positive outlook for the company, selling doesn’t necessarily indicate a negative outlook as they may be selling to meet personal financial needs.
Private Company Ownership
Another important group of owners for potential investors in RUCHINFRA are private companies that hold a stake of 48.10% in RUCHINFRA. These are companies that are mainly invested due to their strategic interests or are incentivized by reaping capital gains on investments their shareholdings. An ownership of this size indicates a strong financial backing and has the potential to influence RUCHINFRA’s business strategy. Thus, investors should dig deeper into RUCHINFRA’s business relations with these companies and how it can affect shareholder returns in the long-term.