Key Insights

• Varun Beverages' significant insider ownership suggests inherent interests in company's expansion
• The top 3 shareholders own 61% of the company
• 19% of Varun Beverages is held by Institutions

If you want to know who really controls Varun Beverages Limited (NSE:VBL), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 37% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

So, insiders of Varun Beverages have a lot at stake and every decision they make on the company’s future is important to them from a financial point of view.

What Does The Institutional Ownership Tell Us About Varun Beverages?

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 Varun Beverages 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Varun Beverages' historic earnings and revenue below, but keep in mind there's always more to the story.

Varun Beverages is not owned by hedge funds. Jaipuria Group is currently the company's largest shareholder with 27% of shares outstanding. Ravi Jaipuria is the second largest shareholder owning 18% of common stock, and Varun Ravi Jaipuria holds about 16% of the company stock. Varun Ravi Jaipuria, who is the third-largest shareholder, also happens to hold the title of Vice Chairman.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Varun Beverages

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems insiders own a significant proportion of Varun Beverages Limited. It has a market capitalization of just ₹1.0t, and insiders have ₹385b worth of shares in their own names. That's quite significant. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.