Elcid investments: From penny stock to India’s most expensive share at Rs 2.36L

Elcid Investments Ltd a company once trading at a humble Rs 353 achieved an extraordinary milestone on October 29 by becoming Indiarsquos most expensive stock with a recordbreaking valuation of Rs 236250 per share This astonishing leap transformed Elcid from a littleknown penny stock into a powerhouse on Dalal Street surpassing the previous recordholder MRF LtdWhat does Elcid Investments doElcid Investments Ltd operates as a nonbanking financial company NBFC registered with the Reserve Bank of India RBI Unlike traditional businesses Elcid primarily focuses on investment holdings managing a robust portfolio in both debt and equity worth over Rs 12450 crore according to its latest annual report for FY24 Its most valuable asset is a 28337 shareholding in Asian Paints Ltdmdashone of Indiarsquos top bluechip firmsmdashestimated at roughly Rs 8500 crore In addition Elcid holds stakes in several unlisted entities strengthening its portfolio and market valuationWhat triggered the price surgeThe recent price surge wasnrsquot tied to earnings or a single announcement but rather resulted from a unique price discovery process implemented by the Bombay Stock Exchange BSE On October 29 Elcid Investments participated in a special call auction which the exchange conducted without typical price bands to help assess the real value of investment holding companies like Elcid This process part of a new mechanism introduced by the Securities and Exchange Board of India SEBI aimed to bridge the valuation gap between the book and market values of such firms This initiative aligns with SEBIs goal to enhance transparency and fair valuation for investment companies ICs and investment holding companies IHCsAs an investment holding company Elcid doesnrsquot engage in conventional operations but instead generates income primarily from its holdings These companies tend to invest across a range of financial assets including stocks mutual funds and debentures The call auction confirmed Elcidrsquos underlying book value which had remained undervalued despite an impressive Rs 4 lakh per share book value pushing its trading price to the unprecedented Rs 236250Recordbreaking returns and investor gainsFor retail investors the news of Elcids meteoric rise signals the rare potential of penny stocks to become multibaggers Historically Elcidrsquos shares have traded between Rs 3 and Rs 15 maintaining a relatively low profile on the exchange However with the special call auction and relisting those who held on to Elcidrsquos stock witnessed gains unlike any other A modest investment of Rs 10000 at the 52week low of Rs 337 would have bought 2967 shares which are now worth an eyewatering Rs 7009 crore For those holding a larger share volume say 10000 shares the total investment of Rs 35300 would have skyrocketed to Rs 250 crore in a single dayWhy was Elcid relistedThe call auction relisting was conducted following a circular from the BSE dated October 21 2024 triggered by the companyrsquos promoters attempting to delist Elcid The delisting process however was halted as it failed to secure the required majority from public shareholders As a result the call auction went forward facilitating a fresh price discovery on October 29 with settlement finalised the following dayIndiarsquos costliest stock and beyondElcid Investments now ranks as the most expensive stock on Indiarsquos exchanges joining a select group of only 30 Indian stocks with values above Rs10000 per share These elite stocks include names like MRF Page Industries Honeywell Automation India Shree Cement and 3M India On a global scale Berkshire Hathaway the renowned investment firm run by Warren Buffett holds the top position as the costliest stock worldwide with shares trading around 682920 or about Rs 56 croreElcid Investmentsrsquo historic rise underscores the potential of undervalued penny stocks although investors are reminded of the risks inherent in such investments With its assets now aligned more closely with market value Elcid stands as a prime example of the unique opportunities that can emerge from regulatory changes aimed at fostering transparency and fairness in Indiarsquos stock marketsElcidrsquos unexpected leap to the top of Indiarsquos stock listings has captivated retail investors offering a glimpse into the transformative power of stock market mechanisms and the latent potential of investment holding companies