"Elcid Investments Soars 66,92,535% in a Day, Redefining India's Stock Market Landscape"

On October 29, Elcid Investments surpassed MRF to become India's priciest stock, following a BSE auction for price discovery of holding companies, with each share valued at Rs 2.25 lakh.

This smallcap stock made headlines on Dalal Street as its price skyrocketed from Rs 3.53 to an incredible Rs 2,36,250 in just one day, marking a staggering increase of 66,92,535%. Meanwhile, MRF shares closed at Rs 1.22 lakh, down 0.61% on the same day. Although the highest trading price for Elcid reached Rs 4.58 lakh, the final price discovery was set at Rs 2.25 lakh.

The BSE auction held on October 28 aimed to establish a clearer market value for holding companies. A Rs 1 lakh investment in Elcid would have yielded an extraordinary return of approximately Rs 670 crore within a few months. This dramatic turnaround sparked discussions among market participants on social media, highlighting the stock's sudden rise.

In June 2024, a SEBI circular introduced a new mechanism to enhance the price discovery process for Investment Companies (ICs) and Investment Holding Companies (IHCs). SEBI observed that many of these entities were trading well below their book values, prompting the introduction of a framework for “special call auctions without price bands” to boost liquidity and fair pricing, thus benefiting investor interest.

On October 29, Elcid began trading at Rs 2.25 lakh, still notably below its book value. In the June 2024 quarter, the company reported a net profit of Rs 135.95 crore, a 39.57% increase from Rs 97.41 crore in June 2023, with net sales reaching Rs 177.53 crore, up 38.28% from Rs 128.38 crore the previous year.

Registered as a non-banking financial company (NBFC) with the RBI, Elcid Investments primarily earns through dividends from its holdings in major firms, such as Asian Paints. The company boasts investments exceeding Rs 11,000 crore, despite lacking its own operational business.

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