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A look at the shareholders of SRF Limited (NSE:SRF) can tell us which group is most powerful. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Companies that have been privatized tend to have low insider ownership.
SRF isn’t enormous, but it’s not particularly small either. It has a market capitalization of ₹119b, which means it would generally expect to see some institutions on the share registry. Taking a look at the our data on the ownership groups (below), it’s seems that institutions are noticeable on the share registry. Let’s delve deeper into each type of owner, to discover more about SRF.
View our latest analysis for SRF
What Does The Institutional Ownership Tell Us About SRF?
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.
We can see that SRF does have institutional investors; and they hold 21% of the stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at SRF’s earnings history, below. Of course, the future is what really matters.
Our data indicates that hedge funds own 7.7% of SRF. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of SRF
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our most recent data indicates that insiders own some shares in SRF Limited. This is a big company, so it is good to see this level of alignment. Insiders own ₹1.3b worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.