Friday, 24 May 2019
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Could The ICICI Prudential Life Insurance Company Limited (NSE:ICICIPRULI) Ownership Structure Tell Us Something Useful? – Simply Wall St

If you want to know who really controls ICICI Prudential Life Insurance Company Limited (NSE:ICICIPRULI), then you’ll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Companies that used to be publicly owned tend to have lower insider ownership.

ICICI Prudential Life Insurance has a market capitalization of ₹524b, so it’s too big to fly under the radar. We’d expect to see both institutions and retail investors owning a portion of the company. In the chart below below, we can see that institutions own shares in the company. Let’s delve deeper into each type of owner, to discover more about ICICIPRULI.

View our latest analysis for ICICI Prudential Life Insurance

NSEI:ICICIPRULI Ownership Summary, April 19th 2019 NSEI:ICICIPRULI Ownership Summary, April 19th 2019

What Does The Institutional Ownership Tell Us About ICICI Prudential Life Insurance?

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

ICICI Prudential Life Insurance already has institutions on the share registry. Indeed, they own 11% of the company. 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 ICICI Prudential Life Insurance’s earnings history, below. Of course, the future is what really matters.

NSEI:ICICIPRULI Income Statement, April 19th 2019 NSEI:ICICIPRULI Income Statement, April 19th 2019

Hedge funds don’t have many shares in ICICI Prudential Life Insurance. 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 ICICI Prudential Life Insurance

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our most recent data indicates that insiders own less than 1% of ICICI Prudential Life Insurance Company Limited. However, it’s possible that insiders might have an indirect interest through a more complex structure. It’s a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own ₹483m worth of shares. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public holds a 11% stake in ICICIPRULI. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 3.2%, of the ICICIPRULI stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it’s hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Public Company Ownership

Public companies currently own 75% of ICICIPRULI stock. We can’t be certain, but this is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand ICICI Prudential Life Insurance better, we need to consider many other factors.

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

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at [email protected] This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.

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Source: https://simplywall.st/stocks/in/insurance/nse-icicipruli/icici-prudential-life-insurance-shares/news/could-the-icici-prudential-life-insurance-company-limited-nseicicipruli-ownership-structure-tell-us-something-useful/

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