New Delhi: A small cap stock named Elcid Investments has created history in the stock market. The share price of the company increased from just Rs 3.53 to Rs 2,36,250. This is an increase of 66,92,535% in one day. This had never been seen before. Elcid has now become the most expensive stock in India. It has also left behind the MRF price of Rs 1.2 lakh.
Why the sudden jump in share prices?
Alcid Investments, with share capital of Rs 2,00,000, holds 2,83,13,860 equity shares or 2.95 per cent stake in Asian Paints Ltd, which is worth about Rs 8,500 crore as per the last closing price. This is the only reason that sells this stock at such a high price in the stock markets. Let us tell you, despite trading at Rs 2.36 lakh per share, the stock is still trading at about 45 percent discount to its intrinsic share price of Rs 4.25 lakh per share based on its stake in Asian Paints.
1.28% stake in Asian Paints
Elcid Investments has 1.28% stake in Asian Paints. Its value is Rs 3,616 crore. This is 80% of the total market cap of Elcid. Even at Rs 2.3 lakh per share, Elcid trades at a price-to-book multiple of just 0.38. With a market capitalization of just Rs 4,725 crore, Elcid is now India's most expensive stock (Rs 2.36 lakh per share). Till now, MRF was the only stock in India whose per share price was more than Rs 1 lakh. Investors should note that share price and valuation are different concepts. A high share price does not necessarily mean that it is expensive, just as a low share price does not directly mean that it is cheap.
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