Share Holding Stock Screener
Every listed company has numerous financial entities that hold the company's shares directly or indirectly. However, the company is legally liable to showcase and update the percentage of ownership with various financial entities. When investors analyse companies for investing, they want to understand the company's ownership structure as it highly affects the company's valuation and share price.
One of the best financial tools to seek valuable insights into the shareholding pattern of a company is a shareholding screener, also called a shareholder screener. Investors use shareholding screeners to gain insights into a company's ownership structure and to identify the major shareholders.
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What is a Shareholding Screener?
When entrepreneurs or business owners start a company, they may need funds to implement their idea by purchasing equipment or hiring employees. Financial entities such as promoters often provide these funds to companies in hopes that they will get better returns on their investments when the company goes public. Apart from promoters, numerous other entities, such as institutional investors, foreign institutional investors, hedge funds, corporations, etc., can invest in the company to gain profits based on a company’s prospects.
Investors looking to invest in a company find it difficult to scan through thousands of companies and filter them based on their shareholding pattern. Since they want to identify stocks with a high promoter holding or a robust ownership structure, they look towards ideal tools that can sort companies based on their shareholding pattern. One of the best tools to filter stocks based on their shareholding pattern is a shareholding screener.
A shareholding screener is a tool that provides information about a company's ownership structure, including details about who owns the company's shares and in what proportion. The shareholding screener, also called the shareholding pattern screener, presents the percentage of shares held by various financial entities, such as promoters, institutional investors, foreign institutional investors, non-institutional investors, and retail investors. Additionally, the shareholding screener also provides information on the number of shares held by each investor category and the number of shares pledged by the promoters.
How To Read A Shareholding Screener?
Investors who invest in the share market successfully swear by shareholding screeners that help them understand the investment and shareholding pattern of financial entities such as institutional investors, hedge funds, large companies, etc. However, reading a shareholder screener requires understanding certain financial terms and factors. Here are the steps to read a shareholding screener:
● Key Terms: The first step to reading the shareholder screener is to understand the included key terms to interpret the screener results effectively. These may include "promoters," "institutional investors," "foreign institutional investors," "non-institutional investors," "public shareholding," "pledged shares," etc.
● Ownership Structure: Once you have understood the key terms, you can run the screener to find results related to the company’s ownership structure. Understanding the ownership structure will ensure that you have an idea about the proportion of shares held by various categories of investors.
● Major Shareholders: After understanding the ownership structure, the next step is identifying the top shareholders. Top shareholders generally include institutional investors, promoter groups, or other large companies or investors who hold a significant stake in the company.
● Ownership Change: The last step is to determine any ownership change in the company by analysing the investment patterns of new or existing investors. If a large investor has recently bought or sold shares, it could indicate a change in investor sentiment toward the company or vice versa.
How To Analyse Shareholding Screener?
A Shareholding screener is an ideal tool that allows investors to know the shareholding pattern of a company, which includes determining how many shares different entities hold. However, it requires extensive analysis of the shareholding pattern screener, to ensure you invest effectively using results. Analysing a shareholding screener involves examining a company's ownership structure and identifying the largest shareholders, their investment patterns, and changes in their positions.
Here are the steps for analysing the screener for the shareholding pattern:
● Identifying Largest Shareholders: While analysing, investors should look for top shareholders who hold a majority of the shares. Companies that have top shareholders as institutional investors, mutual funds, and hedge funds are more likely to see a positive effect on their share price.
● Percentage Of Ownership: Once you have determined the top shareholders, check each shareholder's ownership percentage. The higher the ownership percentage of promoters or big financial entities, the higher the chances of the share price increase soon.
● Ownership Change: Change in ownership highly affects a company's valuation and share price as it impacts investor sentiment. While analysing the shareholding screener, you should look for any change in the company ownership through new investors buying shares or current investors exiting by selling their current holdings.
● Investment Pattern: New investors enter, and existing investors exit based on a certain investment pattern that can affect the company’s valuation and stock price. While analysing, you should look for any specific investment pattern, or trend investors are following to understand the affecting factors and make decisions accordingly.
Examples of Shareholding Screener
Understanding the shareholding pattern is vital for investors who want to ensure successful investments by increasing profits and lowering risk exposure. As multiple entities can invest in a company, the investors need to determine and analyse factors related to their entry, exit, quantity, and investor type. Investors can ensure apt information about shareholding patterns through a host of shareholding screeners designed to offer valuable insights. Here are some examples of shareholding screeners:
● Promotor Screener: Promoters are the individuals or entities that started the company and held the largest stake in the company. They typically have a significant influence on the company's decision-making process. Such a screener provides information about the shareholding pattern of promoters.
● Institutional Investor Screener: Institutional investors are entities such as mutual funds, insurance companies, and pension funds that invest in the company's shares. The screeners ensure that the investors know how much such investors hold in the company.
● Foreign Institutional Investors (FII) Screener: FIIs are institutional investors based outside India. They may have different investment strategies and be subject to different regulations than domestic institutional investors. The FII shareholding screener provides information about the shares held by FIIs.
Investments based on extensive research and understanding of a company's shareholding pattern and ownership structure are well-positioned to succeed. Investors can use shareholding screeners for assistance in identifying potential risks and opportunities, as well as gain a better understanding of a company's overall health and prospects. Whether you're a seasoned investor or just starting, using a shareholding screener can be a valuable part of your investment strategy. By considering institutional ownership, insider ownership, and shareholder activism, you can gain a more comprehensive view of the companies you are considering investing in and make better-informed decisions.
However, it is important to analyse other fundamental and technical factors while making investment decisions. It is wise to use the shareholder screener as a screening tool along with other factors to create an ideal investment strategy and invest accordingly. Investors can use the screener to increase their chances of finding quality companies with strong ownership structures that are well-positioned for long-term success.
Frequently Asked Questions
How do I download a company shareholding pattern?
You can download the shareholding pattern by either visiting the website of the company or the website of the official stock exchange.
Can we check the shareholding pattern of a company?
Yes, as companies are legally liable to update their shareholding pattern regularly, you can check it by visiting the company’s or stock exchange’s website.
Which shareholding pattern is best?
Among numerous shareholding patterns, a diversified holding is considered the best as it offers low risk and good prospects.