Mumbai-based non-banking financial company (NBFC) Elcid Investments made history on Tuesday, skyrocketing from ₹3.53 to ₹2,36,250 per share in a single day, leaving investors astonished.
The unprecedented 6,692,535% surge has vaulted Elcid into the spotlight as India’s most expensive stock, overtaking even MRF’s ₹1.2 lakh per share.
This surge means that, in dollar terms, Elcid is now pricier than the combined stock prices of global giants such as Nvidia, Meta, Amazon, Netflix, and Alphabet, which together amount to $2,655.11, while Elcid’s stock stands at an eye-popping $2,809.74.
However, after this dramatic price leap, trading activity was minimal on Wednesday, raising curiosity over how such a stock could multiply overnight.
What triggered Elcid’s price surge?
Elcid’s record-breaking jump was more than mere market enthusiasm. Historically, its shares traded at single-digit prices despite a substantial book value of ₹5,85,225 per share.
Before this, Elcid last traded at ₹3.53 in June, with limited liquidity keeping its price low. However, a recent regulatory shift has transformed the landscape.
The Securities and Exchange Board of India (SEBI) introduced new measures to better price undervalued holding companies, including a “special call auction” mechanism without price bands, aimed at helping investment companies (ICs) and investment holding companies (IHCs) align more closely with market values.
Under this new system, exchanges held a special price discovery session that allowed Elcid’s shares to trade at their true value.
With a trading volume of only 241 shares, Elcid’s stock skyrocketed to ₹2,36,250, marking an unparalleled rise in Indian market history.
Despite soaring prices, Elcid remains undervalued
Despite the breathtaking share price, analysts caution that this valuation doesn’t necessarily reflect an inflated worth.
According to SAMCO Securities, Elcid’s price-to-book multiple is just 0.38, indicating it remains undervalued relative to its assets.
Notably, Elcid holds a 1.28% stake in the lucrative Asian Paints, valued at around ₹3,600 crore, which accounts for 80% of Elcid’s total market cap of ₹4,725 crore.
This suggests that, despite its astronomical share price, Elcid’s valuation remains modest.
Analysts also emphasize that high prices can simply indicate low liquidity, not necessarily a high valuation.
“A high price per share doesn’t always mean it’s an expensive stock, just as a low price doesn’t mean it’s cheap,” an industry expert remarked.
Elcid stock: strong dividends but reduced yields
Elcid has consistently attracted investors with high dividends, including a payout of ₹25 per share in FY24, yielding over 708% on its previous low share price.
From FY20 to FY22, Elcid maintained consistent dividends, offering ₹15 to ₹25 per share, generating yields as high as 425% on its former price of ₹3.53.
However, with the price surge, Elcid’s once-exceptional dividend yields will diminish since yield is calculated relative to the stock price.
Elcid’s dramatic climb brings renewed attention to undervalued holding companies within Indian markets.
SEBI’s revised price discovery methods have placed companies like Elcid in the limelight, although future movement will depend on sustained market interest and liquidity.
For investors, Elcid’s ascent is a reminder to assess stocks based on both intrinsic value and potential, not just price.
SEBI’s framework could have ripple effects on other undervalued stocks, setting the stage for India’s markets to become a captivating arena for value-focused investors.
Elcid’s story shows that even the most obscure stocks can have surprising potential tucked within their trading history.
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