While institutions invested in United Spirits Limited (NSE:UNITDSPR) benefited from last week's 4.0% gain, public companies stood to gain the most

editorial-team@simplywallst.com (Simply Wall St)

Sun, Nov 17, 2024, 6:10 PM 4 min read

If you want to know who really controls United Spirits Limited (NSE:UNITDSPR), then you'll have to look at the makeup of its share registry. With 57% stake, public companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While public companies were the group that reaped the most benefits after last week’s 4.0% price gain, institutions also received a 22% cut.

Let's take a closer look to see what the different types of shareholders can tell us about United Spirits.

View our latest analysis for United Spirits

ownership-breakdown — NSEI:UNITDSPR Ownership Breakdown November 25th 2024

What Does The Institutional Ownership Tell Us About United Spirits?

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 United Spirits does have institutional investors; and they hold a good portion of the company's stock. 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. 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 United Spirits' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — NSEI:UNITDSPR Earnings and Revenue Growth November 25th 2024

We note that hedge funds don't have a meaningful investment in United Spirits. Diageo plc is currently the largest shareholder, with 57% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With 2.9% and 2.4% of the shares outstanding respectively, HDFC Asset Management Company Limited and United Spirits Ltd, ESOP are the second and third largest shareholders.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of United Spirits

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 information suggests that United Spirits Limited insiders own under 1% of the company. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own ₹94m 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.

General Public Ownership

With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over United Spirits. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Public Company Ownership

It appears to us that public companies own 57% of United Spirits. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

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.

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