Introduction
Elcid investments is making waves with its rise in the last five trading sessions. It has crossed the mark of Rs. 3 lakhs share price and become the most expensive stock. It has reached the 5% upper limit for the sixth session in a row. The exact share price as of Thursday, 7th November was Rs.3,16,597. It initially started witnessing such a surge on October 29 and has kept up with hitting the upper limit and crossing records.
The initial surge was 66,85,452% once it was realised on the stock exchanges. In just one section, the price point of this investment went up to Rs.2,36,250 per share, making it the most expensive on Dalal Street. It has succeeded in beating the long-standing record of MRF. This was a result of the small auction led by the Bombay Stock Exchange. Learn more about the inner workings of Elcid investments achieving such a feat in this blog.
About Elcid Investments
Elcid Investments is registered under the Reserve Bank of India (RBI). It is traded on the stock exchanges as a non-banking financial company (NBFC), falling under the investment company category. It holds a variety of investments, including shares in other listed firms. However, they don't do daily business operations. This results in considerable discounts in their book value while trading. The limited liquidity and low trading volumes contribute to the same. Its book value before the special auction sale was Rs.4 lakh. The stock is still below this book value despite the recent price discovery.
The inner workings of the sudden Elcid Investment share price surge
Elcid Investments book value, i.e., its net assets divided by shares continued to see a growth of Rs.5,85,225 per share since 2011. During this time, its stock price was at Rs.3 a piece. Such an unusual gap between the stock price and the book value caused shareholders to believe the stock's value was more than that. So, they hesitated to sell their shares. As a result, no activity persisted such as a low share price for years.
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When market prices are so low, the Securities Exchange Board of India (SEBI) steps in to investigate. So, SEBI authorised stock exchanges like the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) to do a special call auction. Through such an auction, a fair market price is fixed, where active bidding brings the stock's price closer to its actual value.
Such a special auction resulted in the rise of the Elcid investments. With the effort by SEBI, this stock realised its actual price, which stuck for several years, including this year.
With the new market price that we see today, Elcid Investments has claimed the position as the priciest stock. The place was held, formerly, for many years by MRF. Plus, it is also the second stock to surpass the mark of Rs.1 lakh share price.
Current Annual Report Status of Elcid Investments
Elcid investments are worth more than Rs.12,450 crores as per the current annual report. The company has up to 2.83% stake in Asian Paints. It is valued at Rs.8,500 crores if the recent market prices are to be believed. Such valuation incredibly impacts its overall market valuation. Investment in Asian Paints is crucial for Elcid investments as it skyrockets its net worth. Besides Asian Paints, the company also holds stakes in other unlisted firms.
While Elcid investments have grown and increased their worth, it is wise to note that such a rally in share prices often happens due to a mismatch in demand and supply. For example, in a trading session, only 1,300 shares were exchanged in both NSE and BSE. This is due to low trading activity. In such cases, the price movement is not influenced by fundamental factors but instead by a lack of liquidity and trading volume.
Conclusion
Elcid Investment's record-breaking performance is a testament to how the market functions and, when tweaked, can reveal immense value. This case highlights the impact of the SEBI's regulatory implications through the special auction mechanism. It also serves as a powerful reminder of the hidden potential within the undervalued assets. You can see that even long-overlooked stocks can become market leaders when their intrinsic value is properly realised.
As an investor, you can learn the importance of patience, a keen eye for asset quality, and an understanding of the market dynamics through Elcid's journey. Also, remember that low liquidity and trading volumes also influenced the price surge. That is why it is not all about the intrinsic value but also about the supply-demand mismatches. Hence, it is critical to approach such investments cautiously. You can research further, on them to understand if the share prices reflect long-term value. With such an approach, you can leverage remarkable investment opportunities smartly.
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