In This Article:
The big shareholder groups in ITC Limited (NSE:ITC) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Companies that have been privatized tend to have low insider ownership.
With a market capitalization of ₹3.5t, ITC 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 the our data on the ownership groups (below), it’s seems that institutions own shares in the company. Let’s delve deeper into each type of owner, to discover more about ITC.
View our latest analysis for ITC
What Does The Institutional Ownership Tell Us About ITC?
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.
ITC already has institutions on the share registry. Indeed, they own 46% 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. When multiple institutions own a stock, there’s always a risk that they are in a ‘crowded trade’. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see ITC’s historic earnings and revenue, below, but keep in mind there’s always more to the story.
ITC is not owned by hedge funds. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of ITC
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our data suggests that insiders own under 1% of ITC Limited in their own names. But they may have an indirect interest through a corporate structure that we haven’t picked up on. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own ₹18.4b of stock. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.