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The big shareholder groups in Arvind Limited (NSE:ARVIND) have power over the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that have been privatized tend to have low insider ownership.
With a market capitalization of ₹25b, Arvind is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about ARVIND.
Check out our latest analysis for Arvind
What Does The Institutional Ownership Tell Us About Arvind?
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.
Arvind already has institutions on the share registry. Indeed, they own 38% 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. 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 Arvind’s earnings history, below. Of course, the future is what really matters.
We note that hedge funds don’t have a meaningful investment in Arvind. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Arvind
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. 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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our data suggests that insiders own under 1% of Arvind Limited in their own names. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It has a market capitalization of just ₹25b, and the board has only ₹82m worth of shares in their own names. I generally like to see a board more invested. However it might be worth checking if those insiders have been buying.