The large shareholder groups of SBI Cards and Payment Services Limited (NSE: SBICARD) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders holding shares in smaller companies. We also tend to see a decrease in insider ownership in companies that were previously owned by the state.
SBI Cards and Payment Services is a fairly large company. It has a market capitalization of ₹ 951b. Normally, institutions would own a significant share of a company of this size. In the graphic below, we can see that the institutions are visible on the share register. Let’s take a closer look at what different types of shareholders can tell us about SBI Cards and Payment Services.
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What does institutional ownership tell us about SBI cards and payment services?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it’s included in a major index. . We would expect most businesses to have some institutions listed, especially if they are growing.
SBI Cards and Payment Services already has institutions registered in the share register. Indeed, they hold a respectable stake in the company. This implies that analysts working for these institutions have reviewed the action and appreciate it. But like everyone else, they could be wrong. It is not uncommon to see a sharp drop in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking out the past earnings trajectory of SBI cards and payment services (below). Of course, keep in mind that there are other factors to consider as well.
Hedge funds don’t have a lot of stock in SBI cards and payment services. State Bank of India is currently the largest shareholder in the company with 69% of the shares outstanding. Essentially, this means that they have considerable influence, if not absolute control, over the future of the business. Meanwhile, the second and third largest shareholders hold 3.1% and 1.5% of the outstanding shares, respectively.
While it makes sense to study a company’s institutional ownership data, it also makes sense to study analysts’ sentiments to know which way the wind is blowing. There are a lot of analysts covering the stock, so you can look at expected growth quite easily.
Insider ownership of SBI cards and payment services
The definition of an insider may differ slightly from country to country, but board members still count. The management of the company is accountable to the board of directors and the board must represent the interests of the shareholders. Notably, sometimes senior executives themselves sit on the board of directors.
Most view insider ownership as a positive, as it can indicate that 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 SBI Cards and Payment Services Limited. It’s a very large company, so it would be surprising to see insiders owning a large part of the company. Although their holding is less than 1%, we can see that the board members collectively own 345 million yen of shares (at current prices). Arguably recent purchases and sales are just as important to consider. You can click here to see if any insiders have bought or sold.
General public property
With 13% ownership, the general public has some influence over SBI cards and payment services. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in line with other large shareholders.
Public enterprise ownership
It appears to us that public companies hold 69% of SBI cards and payment services. We cannot be sure, but it is quite possible that it is a strategic issue. Companies can be similar or work together.
I find it very interesting to see who exactly owns a company. But to really get an overview, we have to take other information into account as well. For example, we have identified 2 warning signs for SBI cards and payment services (1 is potentially serious) that you should be aware of.
But finally it’s the future, not the past, which will determine the success of the owners of this business. Therefore, we believe it is advisable to take a look at this free report showing whether analysts are predicting a better future.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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