key insights
- Financial institutions' large holdings in Tech Mahindra suggest they have significant influence over the company's stock price
- A total of 4 investors hold a majority stake in the company, holding 54% of the ownership
- Ownership research and analyst forecast data can help you fully understand the stock opportunity
If you want to know who really controls Tech Mahindra Limited (NSE:TECHM), you'll have to look at the makeup of its share registry. We can see that institutional investors control the majority of the company, with a 49% stake in him. In other words, the group will receive the maximum benefit (or maximum loss) from its investment in the company.
And things are looking up for institutional investors as the company increased its market capitalization to Rs 68 billion last week. The one-year return on investment is currently 37%, so last week's rise would have been rather welcome.
Let's dig deeper into each type of Tech Mahindra owner, starting with the chart below.
Check out our latest analysis for Tech Mahindra.
What does institutional ownership tell us about Tech Mahindra?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often see increased enthusiasm for a stock once it's included in a major index. We would expect most companies to have some institutions on their register, especially if they are growing.
Tech Mahindra already has a share registry registered. In fact, they own a significant stake in the company. This suggests some credibility among professional investors. But we can't rely on that fact alone because institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. If such a trade goes wrong, multiple parties may compete to sell stock quickly. This risk is higher for companies without a history of growth. You can see Tech Mahindra's historic earnings and revenue below, but keep in mind there's always more to the story.
Tech Mahindra is not owned by hedge funds. Mahindra & Mahindra Limited is currently the company's largest shareholder with his 28% of outstanding shares. The second and third largest shareholders are TML Benefit Trust and Life Insurance Corporation of India (Asset Management Arm), with an equal 11% stake in the company's name.
Our research also revealed that around 54% of the company is controlled by the top 4 shareholders, suggesting that these owners exercise significant influence over the business .
While researching institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. . There are plenty of analysts covering the stock, so it might be worth seeing what they are predicting.
Tech Mahindra Insider Ownership
The definition of a company insider can be subjective and varies by jurisdiction. Our data reflects individual insiders, and at least captures board members. Management ultimately answers to the board. However, it is not uncommon for managers to be members of the board of directors. This is especially true if the manager is the founder or CEO.
Most consider insider ownership a positive, because it can indicate the board is well aligned with other shareholders. However, in some cases, too much power may be concentrated within this group.
Our information suggests that Tech Mahindra Limited insiders own less than 1% of the company. However, we note that insiders may have an interest indirectly through private companies or other corporate structures. It is a very large company, so it would be surprising to see that insiders own a large percentage of the company. We can see that the board members collectively own ₹457m worth of shares (at current prices), although their holding is less than 1%. It's good to see board members owning shares, so it might be worth checking if insiders have been buying shares.
Public ownership
The general public, usually retail investors, owns 12% of Tech Mahindra's shares. While this group doesn't necessarily call the shots, it can certainly have a big influence on how the company is run.
Private company ownership
Our data shows that Private companies own 11%, of the company's shares. It might be worth looking into this further. If insiders or other parties have an interest in these private companies, this must be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Public company ownership
It appears to us that public companies own 28% of Tech Mahindra. We can't be sure, but it's very possible that this is a strategic interest. Businesses may be similar or aligned.
Next steps:
I think it would be very interesting to see who exactly owns the company. But to really gain insight, you need to consider other information as well.Case in point: we discovered 2 warning signs for Tech Mahindra you should know.
If you're like me, you might want to consider whether this company will grow or shrink. Luckily you can check this free report showing analyst forecasts for its future.
Note: The numbers in this article are calculated using data from the previous 12 months and refer to the 12-month period ending on the last day of the month in which the financial statements are dated. This may not match the full year annual report figures.
Valuation is complex, but we help make it simple.
Check out our comprehensive analysis, including below, to see if Tech Mahindra is potentially overvalued or undervalued. Fair value estimates, risks and caveats, dividends, insider trading, and financial health.
See free analysis
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This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
