From penny stock to multibagger: THIS is how a little-known company went from ₹3 to ₹2.36 lakh, crossing MRF

For retail investors chasing multibagger dreams, returns in the hundreds—or even thousands—can often feel too good to be true. But small-cap stock Elcid Investments has done the unthinkable, clocking an unimaginable return in a single trading session, positioning itself as the most expensive stock on the Indian stock markets and surpassing the long-standing record set by MRF.

This stunning rise has left many retail investors eyeing Elcid Investments closely, as the company’s stock price skyrocketed from a modest ₹3.53 to 2.36 lakhs in a single day on October 29, creating a history on Dalal Street.

In monetary terms, if an investor had held 10,000 shares in the company, their investment would have skyrocketed to an astounding ₹250 crore, all from an initial outlay of merely ₹35,300.

What triggered the stock’s ascent to this unprecedented level?

The recent surge in its price isn’t merely a response to earnings announcements or any other singular event. Instead, it resulted from a special call auction conducted without price bands, specifically designed for price discovery among investment holding companies organized by stock exchanges.

Historically, the stock has traded within a narrow range of ₹3 to ₹15 since 2011. However, it boasts a remarkable book value of ₹4 lakh per share, indicating that it has been significantly undervalued in the market.

To bridge the gap between the current market value and the book value of holding companies, exchanges have implemented a price discovery process for select investment holding companies through a special call auction mechanism on October 29. 

The special call auction led to an astonishing price level of ₹2,36,250 per share, making the stock most expensive on Dalal Street. This dramatic rise highlights the effectiveness of the new mechanism proposed by the recent SEBI circular, which sought to enhance price discovery for investment companies (ICs) and investment holding companies (IHCs).

Investment companies typically invest in a diverse array of financial instruments such as stocks, mutual funds, and debentures, while IHCs primarily retain ownership of their assets within group companies.

Both ICs and IHCs do not engage in active operations beyond their investment activities, which constitute their primary source of income and assets.

Elcid holds a 2.83% stake in Asian Paints, valued at approximately ₹8,500 crore based on recent market prices, which significantly supports its overall market valuation. This investment is a crucial asset for Elcid, enhancing its overall worth. The company also has stakes in several unlisted firms.

According to its recent FY24 annual report, Elcid’s investments, including both debt and equity, are worth over ₹12,450 crore. The company operates as a non-banking financial company (NBFC) registered with the Reserve Bank of India (RBI) in the category of investment company.

Costliest stocks in India

In India, only ten stocks boast a price exceeding ₹10,000, excluding Elcid Investments. These 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. 

On a global scale, the title of the costliest stock in the world currently belongs to Berkshire Hathaway, the investment company led by Warren Buffett. Its share price is an astounding $682,920, which translates to approximately ₹5.6 crore per share.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.