Elcid Investments, based in Mumbai, is a non-banking financial company (NBFC) with a strong connection to Asian Paints. The promoters of Asian Paints hold a 75% stake in Elcid, while other major shareholders include Hydra Trading (9.04%) and 3A Capital Services (3.34%).
Elcid Investments owns a 1.28% stake in Asian Paints. It is valued at approximately Rs 3,600 crore. This forms about 80% of Elcid’s total market capitalisation of Rs 4,725 crore. Despite its high valuation, Elcid trades at a price-to-book multiple of only 0.38, based on calculations by SAMCO Securities. For FY24, Elcid reported revenues of Rs 235 crore, mainly from dividends, and profits of Rs 176 crore.
Elcid had been trading at an unusually low price for years. Although it was valued around Rs 3 per share since 2011, its book value per share was much higher. It stood at Rs 5,85,225. This large gap was significant. Most existing shareholders were unwilling to sell their shares at such a low price. This resulted in limited trading volumes. As a result, the stock price stayed at a few rupees per share for over a decade. Only a few were willing to trade it.
The massive surge in Elcid’s share price was driven by a regulatory intervention. The Securities and Exchange Board of India (Sebi) asked stock exchanges to hold a special price discovery session. This session aimed at accurately valuing holding companies like Elcid. These companies were trading far below their book value. To facilitate this, the Bombay Stock Exchange (BSE) held a special call auction session for holding companies. Similarly, the National Stock Exchange (NSE) organised their own session. They allowed trades without the usual price bands. This move was meant to boost liquidity and help with fair price discovery for these stocks.
Elcid was one of the listed investment companies that rarely traded. It benefitted from this special session. This event helped reveal its fair value. This price adjustment led to a 6.7 million percent increase in its share price, marking the highest-ever single-day gain on record.