Union Bank of India's significant state or government ownership suggests that the key decisions are influenced by shareholders from the larger public
75% of the company is held by a single shareholder (India)
Institutional ownership in Union Bank of India is 14%
A look at the shareholders of Union Bank of India (NSE:UNIONBANK) can tell us which group is most powerful.And the group that holds the biggest piece of the pie are state or government with 75% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Meanwhile, institutions make up 14% of the company’s shareholders.Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.
In the chart below, we zoom in on the different ownership groups of Union Bank of India.
View our latest analysis for Union Bank of India
NSEI:UNIONBANK Ownership Breakdown November 25th 2024
What Does The Institutional Ownership Tell Us About Union Bank of India?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
As you can see, institutional investors have a fair amount of stake in Union Bank of India.This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does.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 Union Bank of India's historic earnings and revenue below, but keep in mind there's always more to the story.
NSEI:UNIONBANK Earnings and Revenue Growth November 25th 2024
Hedge funds don't have many shares in Union Bank of India.Looking at our data, we can see that the largest shareholder is India with 75% of shares outstanding.This essentially means that they have extensive influence, if not outright control, over the future of the corporation.The second and third largest shareholders are Life Insurance Corporation of India and Life Insurance Corporation of India, Asset Management Arm, with an equal amount of shares to their name at 5.8%.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing.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 Union Bank of India
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 most recent data indicates that insiders own less than 1% of Union Bank of India.Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own ₹967m of stock.It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.
General Public Ownership
With 5.6% ownership, the general public, mostly comprising of individual investors, are a relatively smaller ownership class in Union Bank of India.We would usually expect a higher level of ownership by the general public. With such a small collective position, it may be difficult for small holders to influence the company.
Public Company Ownership
We can see that public companies hold 5.8% of the Union Bank of India shares on issue.It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Union Bank of India better, we need to consider many other factors.For example, we've discovered 2 warning signs for Union Bank of India that you should be aware of before investing here.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
