Key Insights

• Significant control over Sterling and Wilson Renewable Energy by public companies implies that the general public has more power to influence management and governance-related decisions
• 52% of the business is held by the top 3 shareholders
• Insiders have been selling lately

To get a sense of who is truly in control of Sterling and Wilson Renewable Energy Limited (NSE:SWSOLAR), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are public companies with 33% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to ₹150b last week, public companies would have faced the highest losses than any other shareholder groups of the company.

Let’s take a closer look to see what the different types of shareholders can tell us about Sterling and Wilson Renewable Energy.

See our latest analysis for Sterling and Wilson Renewable Energy

What Does The Institutional Ownership Tell Us About Sterling and Wilson Renewable Energy?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Sterling and Wilson Renewable Energy does have institutional investors; and they hold a good portion of the company’s stock. 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 Sterling and Wilson Renewable Energy’s earnings history below. Of course, the future is what really matters.

Hedge funds don’t have many shares in Sterling and Wilson Renewable Energy. Our data shows that Reliance Industries Limited is the largest shareholder with 33% of shares outstanding. With 13% and 7.0% of the shares outstanding respectively, Shapoorji Pallonji And Company Private Limited and Khurshed Daruvala are the second and third largest shareholders. Khurshed Daruvala, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

Researching institutional ownership is a good way to gauge and filter a stock’s expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Sterling and Wilson Renewable Energy

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Shareholders would probably be interested to learn that insiders own shares in Sterling and Wilson Renewable Energy Limited. The insiders have a meaningful stake worth ₹14b. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public– including retail investors — own 28% stake in the company, and hence can’t easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

It seems that Private Companies own 14%, of the Sterling and Wilson Renewable Energy stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

We can see that public companies hold 33% of the Sterling and Wilson Renewable Energy shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Be aware that Sterling and Wilson Renewable Energy is showing 2 warning signs in our investment analysis , you should know about…

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.