Investing in a company requires in-depth research covering several dimensions. In this article, we discuss why it is important to look into the ownership pattern of a company, where to find it and how to use it.
The ownership pattern and its quarterly trend can provide useful insights into the sentiments of institutional and other investors. On Value Research Online stock pages, we provide every aspect of ownership at one place. You get a lot of information which you may otherwise find difficult to gather. Let's explain the pertinent sections using the example of Eicher Motors.
Fund houses invested in a stock
Mutual-fund holding in a company tells us about domestic institutional investors'sentiments towards the company. A high holding or a rising trend of fund holdings shows a rising conviction in a stock. You can get the fund-holding information on a quarterly basis under the Snapshot tab of a company page, which gives mutual-fund holdings as per cent of equity.
Who owns what?
Value Research has a comprehensive database of mutual-fund information. To see mutual-fund investments in companies scheme-wise, along with investments as per cent of funds' net assets, the amounts invested and number of shares held, you can go to the 'Who Owns What?' section. The section can be accessed using the link below the 'Fund Houses Invested in the Stock' table. The 'Who Owns What?' link is also available on the website's homepage, in the Tools section.
Shareholding pattern
Checking the shareholding pattern is very important before making a final call. Check how much the promoter owns and if the promoter holding is adequate to prove that he has conviction in the company. A declining trend or a low holding may indicate that the promoter is losing confidence in the company. Similarly, declining DII or FII holding may signal waning institutional interest. Shareholding pattern is available under the Shareholding Pattern tab on the stock page.
Shareholders more than one per cent
Find out individual and institutional names which hold more than 1 per cent of a company's equity. As per norms, companies disclose this information on a quarterly basis. It is available under the Shareholding Pattern tab of the stock page. You get to know about the people behind the company as promoters and the ones who can influence the voting and other decisions as public investors. The section also lets you study the pattern of shareholding. So, you can find out if a promoter or a major shareholder is adding to or reducing his stake.
Insider trades
The trading done by entities, such as the promoter and suppliers, who may have access to nonpublic information is called insider trading. Though it is otherwise normal if backed by proper conduct and disclosures, looking at insider trades can give information about a possible conflict of interest. For example, the promoter might be selling the stock despite saying that he is confident about the company's future. The insider-trade information is available under the Snapshot tab of the stock page.
