Published: 30th Oct 2024
By: Value Research
Elcid Investments has become an overnight star. The once-penny stock that closed at Rs 3.5 on its previous trading day in June skyrocketed 66,92,535% on October 29, 2024, to quote at Rs 2.3 lakh! With this, Elcid has dethroned MRF as the market’s costliest stock. MRF trades at around Rs 1.2 lakh per share.
If you had invested Rs 1 lakh in Elcid’s share on June 21 (when it last traded before October 29), you would now be sitting on Rs 669 crore! Although note that the share rarely trades in the market due to low liquidity.
Elcid Investments is a holding company, with a nearly 3% stake in Asian Paints. Elcid is also among the promoters of the paint giant. The holding in Asian Paints makes up 93% of Elcid’s total investment portfolio.
The meteoric rise is a result of price discovery in a special call auction. Market regulator SEBI in June introduced special call auctions to ensure fair price discovery for holding companies that often trade well below their book value. Elcid was trading at Rs 3.5 in June, despite its book value exceeding Rs 4 lakh at the time (based on Asian Paints’ market cap).
Elcid’s rise is only a result of SEBI’s intervention to enable fair valuation. Visit our story from the link below to understand the factors you should consider before investing in holding companies.
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