With 38% ownership, PB Fintech Limited (NSE:POLICYBZR) has piqued the interest of institutional investors

Key insight

• Given the institutions’ large stake in the stock, PB Fintech’s share price may be vulnerable to their trading decisions
• 52% of the business is owned by the top 8 shareholders
• Ownership surveys along with analyst forecast data help provide a good understanding of a stock’s potential

Every investor in PB Fintech Limited (NSE:POLICYBZR) should be aware of the most powerful shareholder groups. And the group with the biggest piece of the pie are institutions with 38% ownership. This means that the group will gain the most if the stock rises (or lose the most if there is a decline).

Because institutional owners have a huge pool of resources and liquidity, their investment decisions tend to carry a lot of weight, especially with individual investors. As a result, a significant amount of institutional money invested in a firm is generally seen as a positive attribute.

Let’s take a closer look to see what the different shareholder types can tell us about PB Fintech.

Check out our latest analysis for PB Fintech

What does institutional ownership tell us about PB Fintech?

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

We can see that PB Fintech has institutional investors; and they have a good portion of the company’s shares. This suggests some credibility among professional investors. But we can’t rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If several institutions change their view on a stock at the same time, you can see the stock price drop quickly. It is therefore worth looking at PB Fintech’s earnings history below. Of course, the future is what really matters.

We note that hedge funds do not have a meaningful investment in PB Fintech. Info Edge (India) Limited is currently the largest shareholder, with 20% of the shares outstanding. Meanwhile, the second and third largest shareholders hold 8.6% and 5.6% of outstanding shares respectively. Furthermore, CEO Yashish Dahiya owns 4.8% of the company’s shares.

We dug a little more and found that 8 of the top shareholders account for about 52% of the register, which suggests that along with larger shareholders there are a few smaller shareholders, thus balancing each other’s interests somewhat.

While studying institutional ownership of a company can add value to your research, it’s also good practice to examine analyst recommendations to gain a deeper understanding of a stock’s expected performance. Quite a few analysts cover the stock, so you can easily take a closer look at the forecast for growth.

Insider ownership of PB Fintech

The definition of an insider may vary somewhat between different countries, but board members always count. Management ultimately answers to the board. However, it is not uncommon for executives to be board members, especially if they are a founder or CEO.

I generally consider insider ownership a good thing. But in some cases it makes it more difficult for other shareholders to hold the board accountable for decisions.

Shareholders are likely to be interested to know that insiders own shares in PB Fintech Limited. It’s a pretty big company, so it’s generally positive to see a potentially meaningful adaptation. In this case, they own shares worth INR 22 billion (at current prices). If you want to explore the issue of insider alignment, click here to see if insiders have bought or sold.

General public ownership

With an ownership of 15%, the general public, mainly consisting of individual investors, has a degree of influence over PB Fintech. This size of ownership, although significant, may not be enough to change company policy if the decision is not in sync with other major shareholders.

Private Equity Ownership

With a 5.6% stake, private equity companies can influence the PB Fintech board. Some investors may be encouraged by this, as private equity is sometimes able to encourage strategies that help the market see the value in the company. Alternatively, these holders may exit the investment after disclosing it.

Private company ownership

We can see that Private Companies own 3.9% of the shares that have been issued. It’s hard to draw any conclusions from this fact alone, so it’s worth looking at who owns these private companies. Sometimes insiders or other related parties have interests in shares in a public company through a separate private company.

Public ownership

Public companies currently own 28% of the PB Fintech share. We cannot be sure, but it is entirely possible that this is a strategic effort. The businesses can be the same, or collaborate.

Next step:

Although it is well worth considering the various groups that own a company, there are other factors that are even more important.

I always like to look for one history of revenue growth. You can too, by accessing this free chart of historical earnings and earnings in this detailed graph.

But in the end it is the future, not the past, that will determine how well the owners of this business will do. That’s why we think it’s advisable to take a look at this free report that shows whether analysts are predicting a brighter future.

NB: Figures in this article have been calculated using data from the last twelve months, which refers to the 12-month period ending on the last date of the month in which the accounts are dated. This may not be consistent with the annual report for the entire year.

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This article by Simply Wall St is general. We provide commentary based on historical data and analyst forecasts only using an objective 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. We aim to provide you with long-term focused analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.