Vedanta's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
54% of the company is held by a single shareholder (Conclave PTC Limited)
Institutional ownership in Vedanta is 21%
If you want to know who really controls Vedanta Limited (NSE:VEDL), then you'll have to look at the makeup of its share registry.And the group that holds the biggest piece of the pie are private companies with 58% ownership.Put another way, the group faces the maximum upside potential (or downside risk).
Institutions, on the other hand, account for 21% of the company's stockholders.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 Vedanta.
Check out our latest analysis for Vedanta
NSEI:VEDL Ownership Breakdown November 25th 2024
What Does The Institutional Ownership Tell Us About Vedanta?
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.
As you can see, institutional investors have a fair amount of stake in Vedanta.This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong.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 Vedanta's earnings history below. Of course, the future is what really matters.
NSEI:VEDL Earnings and Revenue Growth November 25th 2024
Hedge funds don't have many shares in Vedanta.Conclave PTC Limited is currently the company's largest shareholder with 54% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation.With 7.5% and 2.8% of the shares outstanding respectively, Life Insurance Corporation of India, Asset Management Arm and Vedanta Holdings Mauritius Limited are the second and third largest shareholders.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments.There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Vedanta
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least.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 data suggests that insiders own under 1% of Vedanta Limited in their own names.But they may have an indirect interest through a corporate structure that we haven't picked up on.It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own ₹191m worth of shares (at current prices).In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.
General Public Ownership
With a 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Vedanta.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.
Private Company Ownership
Our data indicates that Private Companies hold 58%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.Be aware that Vedanta is showing 3 warning signs in our investment analysis , you should know about...
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.
