In an unprecedented surge, Elcid Investments has rewritten the history books of Dalal Street, recording a phenomenal rise from ₹3.53 to ₹2,36,250 per share in just one day. The small-cap stock has surpassed MRF, making Elcid India’s most expensive stock. This surge, driven by a unique price discovery auction, marks one of India’s stock market’s most significant single-day gains ever witnessed.
Elcid’s Meteoric Rise: 66,92,535% Increase in a Day
Elcid Investments saw an astonishing increase of 66,92,535% in its share price during a call auction organised by the BSE and NSE. Designed to achieve fair value discovery for investment holding companies, the session unlocked Elcid’s true market potential, moving it from an almost non-traded stock at ₹3.53 to a remarkable ₹2,36,250 in one trading session.
Why Did Elcid’s Share Price Soar?
Unlike speculative stock surges seen in the past, Elcid’s case wasn’t driven by investor hype but rather by a SEBI-mandated price discovery process. Despite being priced at ₹3 per share for over a decade, Elcid’s book value was a substantial ₹5,85,225. This massive discount meant existing shareholders weren’t interested in selling, leading to almost zero trading activity since 2011. The special session aimed to narrow this gap, leading to a fair valuation that finally reflected its book value and portfolio.
Elcid’s Asset Value: A Key Driver Behind the Rise
Elcid Investments owns a 1.28% stake in Asian Paints, valued at around ₹3,616 crore, which makes up nearly 80% of its total market capitalisation. This impressive asset valuation significantly affected Elcid’s sudden stock price escalation. Even at the new price of ₹2.3 lakh per share, Elcid trades at a price-to-book multiple of just 0.38, indicating it remains undervalued compared to its actual assets, according to Samco Securities.
Also Read: Quant Mutual Fund Becomes Top Investor in Adani’s ₹4,200 Crore QIP
What is a Special Call Auction for Price Discovery?
SEBI’s call auction for price discovery addressed the steep discount at which some investment holding companies traded relative to their book values. The BSE and NSE organised a particular auction to help establish fair prices, ensuring that these stocks are valued closer to their actual worth. For Elcid, this process led to an unprecedented price jump, offering insight into the often-overlooked valuation gaps in Indian holding companies.
Elcid vs. MRF: India’s Most Expensive Stocks
With its new price of ₹2.36 lakh per share, Elcid has overtaken MRF, which previously held the title for India’s highest-priced stock with a per-share price of ₹1.2 lakh. However, it’s essential to note that a high share price does not necessarily indicate an overvalued or expensive stock. While Elcid’s price is high, it reflects a massive asset value and relatively low price-to-book multiple, highlighting that valuation and share price can differ.
Key Takeaways for Investors: Share Price vs. Valuation
Elcid’s price surge reminds investors to differentiate between share price and stock valuation. A high share price doesn’t always mean a stock is expensive, just as a low price doesn’t guarantee a good deal. Elcid’s story emphasises the importance of understanding a company’s asset base, book value, and valuation metrics before making investment decisions.
Conclusion: A New Milestone in India’s Stock Market
Elcid Investments has become a landmark case on Dalal Street, illustrating the impact of fair value discovery on under-traded stocks with high book values. This record-breaking day in the stock market’s history underscores SEBI’s role in achieving fair valuations and the potential returns hidden within investment holding companies.
FAQs
Ans: Elcid Investments is a holding company primarily valued for its 1.28% stake in Asian Paints. It generates value through equity holdings rather than active business operations or services.
