Syngene International Limited (NSE: SYNGENE) share price fell 3.7% last week; public companies would not be happy

A look at the shareholders of Syngene International Limited (NSE: SYNGENE) can tell us which group is the most powerful. And the group that holds the biggest slice of the pie are 65% owned state-owned companies. That is, the group will benefit the most if the stock goes up (or lose the most if there is a downturn).

As the market capitalization fell to ₹246 billion last week, public companies are believed to have suffered the highest losses than any other group of shareholders in the company.

In the table below, we zoom in on the different ownership groups of Syngene International.

Discover our latest analysis for Syngene International

NSEI: Distribution of ownership of SYNGENE November 10, 2022

What does institutional ownership tell us about Syngene International?

Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.

Syngene International already has institutions registered in the share register. Indeed, they hold a respectable stake in the company. This may indicate that the company has some degree of credibility in the investment community. However, it is best to be wary of relying on the so-called validation that accompanies institutional investors. They are also sometimes wrong. If multiple institutions change their minds on a stock at the same time, you could see the stock price drop quickly. It is therefore worth taking a look at Syngene International’s earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NSEI: SYNGENE Earnings and Revenue Growth November 10, 2022

Syngene International does not belong to hedge funds. Looking at our data, we can see that the major shareholder is Biocon Limited with 65% of the shares outstanding. This implies that they have majority control over the future of the company. abrdn plc is the second largest shareholder with 2.0% of the ordinary shares, and ICICI Prudential Asset Management Company Limited owns approximately 1.4% of the company’s shares.

While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. There are plenty of analysts covering the stock, so it might be interesting to see what they are predicting as well.

Syngene International Insider Ownership

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company runs the company, but the CEO will answer to the board of directors, even if he is a member of it.

I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.

Our data suggests that insiders own less than 1% of Syngene International Limited in their own name. This is a fairly large company, so it would be possible for board members to hold a significant stake in the company, without holding much proportional interest. In this case, they own around ₹1.1 billion worth of shares (at current prices). It’s good to see board members owning stock, but it can be helpful to check whether those insiders have bought.

General public property

The general public, including retail investors, owns 20% of the company’s capital and therefore cannot be easily ignored. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.

Ownership of a public company

It appears to us that public companies hold 65% of Syngene International. We cannot be sure, but it is quite possible that it is a strategic issue. Businesses can be similar or work together.

Next steps:

It is always useful to think about the different groups that own shares in a company. But to better understand Syngene International, we need to consider many other factors. Take for example the ubiquitous specter of investment risk. We have identified 1 warning sign with Syngene International, and understanding them should be part of your investment process.

But finally it’s the future, not the past, which will determine the performance of the owners of this company. Therefore, we think it’s advisable to take a look at this free report showing whether analysts are predicting a brighter future.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

Valuation is complex, but we help make it simple.

Find out if Syngene International is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

Karen J. Nelson