Ownership Distribution and Shareholder Value Creation in Indian Stock Markets: A Note

XLRI Jamshedpur School of Business Working Paper No. 2001-09

8 Pages Posted: 29 Dec 2006

See all articles by Ram Kumar Kakani

Ram Kumar Kakani

Lal Bahadur Shastri National Academy of Administration (LBSNAA)

Date Written: September 2001

Abstract

This paper is an extension of our previous research done for National Stock Exchange of India on the determinants of corporate performance. It looks at the managerial (investment) implications of the above study. We conclude that investors should avoid investing in stocks wherein dispersed Retail Investors and/or Domestic Financial Institutions hold a large amount of stock, since, good monitoring by these stakeholders is not visible in our study. In other words, one should prefer those stocks in which owner-managers having good management record have invested more of their time and money and also hold a larger stake in the firm. In addition, care should be taken to see that one avoids investing in firms wherein owners having highly diversified interests are avoided.

Keywords: Ownership, Shareholding, Financial Performance, Retail Investors, India, and Shareholder Value

JEL Classification: G32, G30, L10, N25

Suggested Citation

Kakani, Ram Kumar, Ownership Distribution and Shareholder Value Creation in Indian Stock Markets: A Note (September 2001). XLRI Jamshedpur School of Business Working Paper No. 2001-09, Available at SSRN: https://ssrn.com/abstract=914107 or http://dx.doi.org/10.2139/ssrn.914107

Ram Kumar Kakani (Contact Author)

Lal Bahadur Shastri National Academy of Administration (LBSNAA) ( email )

Mussorie, Uttarakhand 248179
India

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