This is what the shareholding structure of Vimta Labs Limited (NSE: VIMTALABS) looks like

If you want to know who actually controls Vimta Labs Limited (NSE: VIMTALABS), then you’ll need to look at the makeup of its share registry. Generally speaking, as a company grows, institutions increase their ownership. Conversely, insiders often decrease their ownership over time. I like to see at least a little insider ownership. As Charlie Munger said “Show me the incentive and I’ll show you the result”.

With a market capitalization of ₹8.5 billion, Vimta Labs is a small cap stock, so it may not be well known to many institutional investors. Our analysis of company ownership, below, shows that institutions are not really present in the share register. Let’s take a closer look at what different types of shareholders can tell us about Vimta Labs.

See our latest analysis for Vimta Labs

NSEI: VIMTALABS Ownership Breakdown April 6, 2022

What does institutional ownership tell us about Vimta Labs?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.

Institutions have a very small stake in Vimta Labs. This indicates that the company is on the radar of some funds, but it is not particularly popular with professional investors at the moment. So if the business itself can improve over time, we may well see more institutional buyers in the future. When several institutional investors wish to buy shares, we often see a rise in the price of the share. Past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

earnings-and-revenue-growth
NSEI: VIMTALABS Earnings and Revenue Growth April 6, 2022

Hedge funds don’t have a lot of shares in Vimta Labs. Eurofins Scientific SE is currently the main shareholder of the company with 20% of the outstanding shares. Sivalinga Vasireddi is the second largest shareholder with 16% of the common shares and LCGC Chromatography Solutions Pvt Ltd owns approximately 9.4% of the company’s shares. Additionally, the company’s CEO, Harita Vasireddi, directly owns 0.8% of the total shares outstanding.

Looking further, we found that 54% of the shares are held by the top 4 shareholders. In other words, these shareholders have a say in the decisions of the company.

While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. Our information suggests there is no analyst coverage of the stock, so it is likely little known.

Vimta Labs Insider Property

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.

It appears that insiders own a large share of Vimta Labs Limited. Insiders have a ₹3.2 billion stake in this ₹8.5 billion venture. This may suggest that the founders still own a lot of shares. You can click here to see if they bought or sold.

General public property

The general public, including retail investors, owns 28% of the company’s capital and therefore cannot be easily ignored. While this size of ownership may not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.

Private Company Ownership

Private companies appear to own 13% of Vimta Labs shares. It might be worth exploring this further. If related parties, such as insiders, have an interest in any of these private companies, this should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Ownership of a public company

We can see that public companies own 20% of outstanding Vimta Labs shares. It may be a strategic interest and both companies may have related business interests. They may have separated. This exploitation probably deserves further investigation.

Next steps:

It is always useful to think about the different groups that own shares in a company. But to better understand Vimta Labs, we need to consider many other factors. Example: we have identified 1 warning sign for Vimta Labs you should be aware.

Sure this may not be the best stock to buy. So take a look at this free free list of interesting companies.

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.

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.