Elcid Investments shares hit 5% upper circuit, continues record-breaking surge

Shares of Elcid Investments soared 5% in Thursday’s trade, hitting the upper circuit at Rs 2,48,062.5 on the BSE. This rally extends Elcid’s remarkable rise, which has captured market attention due to its transformation from a little-known smallcap stock to India’s most expensive one, surpassing even MRF’s per-share price.

On Wednesday, Elcid made headlines with an unprecedented jump of 66,92,535%, rising from Rs 3.53 to Rs 2,36,250 following a special call auction session on October 29, organised to uncover the fair value of undervalued holding companies. On Thursday, the stock surged even higher, reaching Rs 2,48,062.5 — a leap from Rs 3.53 that now comes out to be an astonishing 70,27,166%.

The October 29 auction session established a fair value for Elcid shares at Rs 2.25 lakh, still significantly below the company’s substantial book value of Rs 5,85,225 per share.

Elcid has also been known for generous payouts, with a dividend of Rs 25 declared for FY24, previously translating to an industry-leading dividend yield of over 708% due to its low trading price.

However, the recent surge will substantially adjust the dividend yield to align with the stock’s new market value. Elcid offered Rs 25 per share in FY23 and Rs 15 in the three years prior, with yields around 425% from FY20 to FY22.

Elcid’s rise has also displaced MRF as India’s highest-priced stock. While MRF’s market capitalization was Rs 51,850 crore on Wednesday, Elcid’s stood at Rs 4,961 crore. The valuation is primarily driven by its 1.28% stake in Asian Paints, valued at Rs 3,616 crore and accounted for around 80% of Elcid’s total market cap. Despite the high share price, Elcid still trades at a price-to-book multiple of around 0.4, indicating further potential upside according to analysts.The Securities and Exchange Board of India (SEBI) initiated the special auction session to address the undervaluation of holding companies trading at deep discounts to their book values. Elcid shares had historically seen low trading volumes, and this session allowed for a fair value discovery that spurred the stock’s exceptional gains.Investors must note that share price and valuation are different concepts. A high share price doesn’t necessarily mean expensive, just like a low share price doesn’t directly mean that the stock is cheap.

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