For retail investors seeking multibagger returns, the surge of penny stock Elcid Investments has redefined possibilities, achieving an unprecedented return in a single trading session. The stock's price skyrocketed from Rs 3.53 to Rs 2.36 lakh on October 29, making it the most expensive stock in Indian markets, surpassing the long-standing record held by MRF.
This remarkable ascent has captured the attention of retail investors, as those holding 10,000 shares would have seen their investment soar to an astonishing Rs 250 crore from a mere initial outlay of Rs 35,300.
What fueled this meteoric rise? Unlike typical price movements driven by earnings announcements, this surge stemmed from a special call auction conducted without price bands, aimed at facilitating price discovery for investment holding companies, as organised by stock exchanges.
Historically, Elcid Investments traded within a narrow range of Rs 3 to Rs 15, but it is backed by a significant book value of Rs 4 lakh per share, indicating its undervaluation in the market. The recent special call auction led to an extraordinary price of Rs 2,36,250 per share, reflecting the effectiveness of the new mechanism introduced by a recent SEBI circular to enhance price discovery for investment companies (ICs) and investment holding companies (IHCs).
Investment companies typically diversify their holdings across various financial instruments, while IHCs primarily retain ownership within their group companies. Both categories do not engage in active operations beyond investment activities, which form their main source of income and assets.
Elcid holds a 2.83per cent stake in Asian Paints, valued at approximately Rs 8,500 crore based on current market prices, significantly bolstering its overall valuation. Additionally, the company maintains stakes in several unlisted firms.
According to its recent FY24 annual report, Elcid's combined investments in debt and equity exceed Rs 12,450 crore. It operates as a non-banking financial company (NBFC) registered with the Reserve Bank of India (RBI) in the investment company category.
In India, only 30 stocks have prices exceeding Rs 10,000, with Elcid Investments now leading the pack. Notable high-value stocks include MRF, Page Industries, Honeywell Automation India, Shree Cement, 3M India, Abbott India, Nestle India, Bosch, Procter & Gamble Hygiene, and Lakshmi Machine Works.