Mumbai-based non-banking financial company Elcid Investments made headlines last week after the company’s shares price rocketed to over ₹2 lakh each from ₹3 per share. Currently, the company is trading at about ₹3 lakh per share.

What Happened: The BSE conducted a special call auction on October 28 for price discovery for investment holding companies following the Securities and Exchange Board of India’s new mechanism aimed at bridging the gap between the current market values and book values of investment companies (ICs) and investment holding companies (IHCs).

In just a day, Elcid’s shares increased multifold, but experts believe it could go higher. While Elcid has no major business activity, the company’s primary source of earnings is the dividends it receives from its units.

Elcid is also a promoter of Asian Paints. At the end of September 2024, Elcid held 2.83 crore shares in the paint major or roughly 2.95% of the company. As odd as Wednesday’s close, its holding in Asian Paints is roughly ₹8,203 crore, while the paint firm’s market capitalisation stands at ₹6,331.95 crore.

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In a conversation with Benzinga, Kranthi Bathini, director at WealthMills Securities pointing out the difference, said that the stock is still undervalued and has further scope to go up. Bathini said that the stock has the potential to by and large reach its book value, which currently stands at ₹5.84 lakh.

Talking about the viral stock, Bathini added that while such companies make good topics for discussion, they may not be ideal for an investor given the lack of business activity.

“Companies like Elcid are not suitable for every investor since there is no business activity in such firms,” he said.

As per Elcid’s latest shareholding pattern, it has a total of 2 lakh shares, held by only 328 investors. Of these, the promoter group owns 1.5 lakh shares, while the remaining 50,000 shares are held by 322 public investors. In recent years, Elcid shares have barely seen any trades as there were mostly no sellers.

Price Action: Elcid’s shares gained 5% on Thursday to trade at ₹3,16,597.44 per share.

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