Stock in Action Elcid Investments 30 October 2024

Elcid Investments Share Price

Highlights

1. Elcid Investments has recently experienced a remarkable stock surge.
2. It is now recognized as the most expensive stock in India.
3. The company's strong financial performance has attracted significant investor interest.
4. This surge followed a successful BSE price discovery auction.
5. Elcid Investments holds a substantial stake in Asian Paints, enhancing its value.
6. The share price history of Elcid Investments reflects its dramatic rise in recent months.
7. As an investment holding company in India, it focuses on strategic asset management.
8. Investors should be aware of potential liquidity risks in the stock market.
9. Elcid is categorized as a non-banking financial company (NBFC), specializing in investments.
10. The latest Q1 FY25 results indicate robust growth and profitability for Elcid Investments.

Why Elcid Investments is in News? 

Elcid Investments Ltd has recently made headlines by becoming the most expensive stock in the Indian market, surpassing MRF Ltd. After relisting on the Bombay Stock Exchange (BSE) on October 29, 2024, its share price skyrocketed from just ₹3.21 in July to ₹2,36,250, marking an unprecedented surge of over 73,600 times. This remarkable price jump has attracted significant attention from investors and analysts alike, sparking discussions about the valuation and potential of investment holding companies in India. 

Elcid Investment Ltd. Business Overview

Elcid Investments Ltd operates as a non-banking financial company (NBFC) registered with the Reserve Bank of India (RBI). The company primarily engages in holding and managing investments in various securities, including shares, debentures, and mutual funds. Notably, Elcid holds a 2.95% stake in Asian Paints Ltd, valued at approximately ₹8,500 crore, which significantly contributes to its market valuation. The firm has no operational business of its own, relying instead on dividends from its substantial investments.

The company also has two wholly owned subsidiaries: Murahar Investments & Trading Co Ltd and Suptaswar Investments & Trading Co Ltd. These subsidiaries further enhance Elcid’s portfolio by holding additional equity in various firms.

Financials of the Elcid Investment

Elcid Investments has shown impressive financial growth recently. For Q1 FY25, the company reported a revenue increase of 38.58% year-on-year, rising from ₹128.38 crore to ₹177.91 crore. Its net profit grew by 40% year-on-year, reaching ₹135.94 crore, indicating a robust net profit margin of 76.41%. The financial performance reflects the company’s strong investment strategy and the increasing value of its holdings, particularly in major firms like Asian Paints.

Price Surge History

Elcid Investments’ stock price was historically stagnant, trading at around ₹3 per share for years. However, the introduction of a special call auction for investment holding companies by the BSE, aimed at improving price discovery, radically transformed its valuation. On October 29, 2024, following this auction, Elcid's shares were initially valued at ₹2,25,000 and quickly climbed another 5%, closing at ₹2,36,250. This dramatic shift has made Elcid the most expensive stock in India, outpacing even established giants like MRF, which has long held this title.

Liquidity of the ELcid Investment

Despite the impressive surge in share price, liquidity remains a critical concern for Elcid Investments. The stock had experienced minimal trading activity for years, with little to no exchange of hands, rendering it illiquid. The recent auction has provided a fresh opportunity for price discovery, yet investors must remain cautious. As Hitesh Dharawat from Dharawat Securities notes, liquidity risks are inherent in such investment holding companies, emphasizing the need for investors to consider exit strategies before committing funds.

Conclusion

Elcid Investments Ltd’s share price, meteoric rise has captured the attention of the investment community, highlighting the potential and pitfalls of investing in holding companies. While the company boasts strong financials and valuable stakes in established firms, investors must navigate the complexities of liquidity and market sentiment. As Elcid continues to evolve, its trajectory will be closely monitored, offering valuable insights into the dynamics of investment holding companies in India’s stock market.