Rs 1.8 lakh turned into Rs 984 crore: How this penny stock made crorepatis in 2024

Multibagger stock: Shares of a BSE-listed investment company, which now commands a market capitalisation of Rs 3,804 crore, delivered a massive 55,751 times return within six months. The company had only 322 public shareholders at the end of September quarter -- add six promoters, the total shareholder count stands at 328.

Only 50,000 shares are held by public shareholders, who command 25 per cent stake in the company. They include 284 retail investors with up to Rs 2 lakh worth shares, accounting for 7.43 per cent stake in the company. The number of retail shareholders has not changed much in the past few quarters.

At June low of Rs 3.53 apiece, shares held by these 322 public shareholders in the company were valued at a meagre Rs 1.77 lakh. Today, they are worth Rs 984 crore. This is Elcid Investments Ltd.

This is a known, but illiquid stock, with the scrip seeing its first trade of 2024 on June 21. It saw only two days of trading in 2023 and nine days of trading in 2021. But why?

Even as the stock was trading at Rs 2.00-3.50 per share in the past few years, Elcid Investments remained one of the promoter entities of Asian Paints Ltd (at least since 2006 ) and owned 2.95 per cent stake or 2,83,13,860 shares in the paints maker, as on September 30.

These 2,83,13,860 Asian Paints shares alone are worth Rs 6,490 crore at Thursday's levels. Add to that, two of its subsidiaries Murahar Investments & Trading Co Ltd and Suptaswar Investments & Trading Co Ltd, as per its annual report 2023-24, held stakes to the tune of 0.60 per cent and 0.68 per cent, respectively, in Asian Paints in Q2. The two stakes amount to another Rs 2,818 crore.

There were buyers, but no seller as there was no proper price discovery.

Sebi took notice and in June it announced special call auction for scrips of listed investment companies and investment holdings company, noting a few listed ICs and IHCs were being traded infrequently and at a price which was significantly lower than the book value disclosed by these companies in their latest audited financial statements.

Without naming anyone, Sebi noticed these companies generally have no day-to-day operations and hold investments in different asset classes including in scrips of other listed companies.

"The variance in the market price and book value of such ICs and IHCs is adversely affecting liquidity, fair price discovery and the overall interest of investors in scrips of such companies," it said in June.

To address this, it decided to put in place a framework for “special call auction with no price bands” for effective price discovery of scrips of such ICs and IHCs. Elcid Investments jumped nearly 67,000 per cent on October 29, hitting a high of Rs 2,36,250. The scrip hit further high of Rs 3,32,399.95 by November 8, only to see some correction later.