Ownership structure and role of large blockholders in the governance of indian conglomerates

Conglomerates control large part of production assets of Indian private sector. The conglomerates control large number of firms through various means such as pyramidal ownership structure, cross-shareholding, and through other means. The controlling group of a conglomerate may not act in the best interest of the outside minority shareholders. Thus, in such cases the large blockholders particularly Institutional Investors can put pressure on the controlling shareholders and ensure that there shall be good governance. Therefore, in the Indian context we have analyzed the ownership structure of top twenty conglomerates which are ranked based on their market capitalization, which reveals that the presence of large number of the institutional investors whose shareholding varies from 2.85 to 56.02 percent.