What is Elcid investments
Elcid is a holding company for 100s of listed stocks and several mutual funds. To quote a few, it has 2.8 crores shares of Asian paints, 1.3 lakh shares of Berger paints, 1000s of shares of Bajaj Finserv, Axis Bank, Finolex Cables etc. Not only this but it also has loads of mutual funds it has invested in.
The promoter holding is close to 75%. Detailed holding is given in the section below. Before we will dive into whether you can buy the stock or not but first lets look at the basics.
Overview of Elcid
Share price is stuck at INR 10,0 since 22nd July 2020 when it was traded last. The stock has been traded less than 50 times since 2011. Elcid gives a constant dividend of INR 15 every year and has a book value of around 15,000 rupees. Also the EPS is close to 1300 rupees. Clearly a stock available super cheap. A sure shot multibagger for the future… so why is no one buying it ?
Promoter Holding Of Elcid
A total of 2,00,000 shares exist out of which promoters hold around 75% of it. The detailed promoter holding is given below, other than this there are only about 250 investors that hold the remaining 25%
Elcid has two wholly owned sibsidiaries and both are registered as NBFCs with RBI. Murahar Investments & Trading Co Ltd and Suptaswar Investments & Trading Co Ltd.
Balance Sheet of Elcid Investments
Why is no one buying the stock
Because no one is selling it!
The reason why you or I have not bought this stock is because it is trading at INR 10 which is lower than the 1 lakh price tag of this stock.
If you have a stock worth 1 lakh, would you sell it for 10 rupees? No! Hence as no one is selling their holdings, no one can buy it.
Months go buy and not a single share is traded. Everyday you will see 1000s of shares in buy order with the hope that someone will sell a share. But no one does. The stock has traded less than 25 times since 2011 when it listed. Hence the probablity of you getting a share by regular trading is super low!
Stock holdings of Elcid Investments
The following few screenshots from the 2019 annual report capture the shares Elcid has invested in. These are as per the annual report and provides the number of all the stocks they hold.
Just their Asian Paints stock holding is worth more than 4000 crores and the total stocks and mutual fund holding will easily be north of 10k crores. But the market cap of this company is a mere 0.19 crore. Some notable investments include.
The stock was last traded in July 2020, when it hit the 5 per cent upper circuit at Rs 10.01
Mutual Fund holding of Elcid Investments
Attempts for Price discovery of share price
Various stakeholder groups have approached Bombay High Court to intervene in the matter and issue directives to markets regulator Sebi and BSE. Many shareholders have been advocating a ‘call auction’ to discover fair price in Elcid Investments.
Stakeholder groups have approached the Bombay High court (source) to help them in the value discovery of this stock. Some have even approached SEBI to intervene and some shareholders have been asking for a call auction to determine the right share price.
Promoters, in 2013, announced an offer for sale for 5,000 and they also announced a delisting offer for INR 11,455 per share but the delisting offer was rejected by share holders as the real value is 10x the delisting price.
Overall, neither the BSE nor SEBI took the matter seriously and there is no such law that makes them do so. There is no law in the Indian financial market that requires a company to do real price discovery.
There is no such law as of today that allows any relief to investors. Both SEBI and BSE have not taken the investor concerns seriously and to be frank they have a lot of stuff going on to take every complaint seriously.
Ideal would be to have the BSE exchange take notice of it and do something about it. If they can do a price discovery session, the price might shoot up to 1,00,000 easily and then you might find more sellers.
The last thing BSE should do is suspend trading. Which is highly likely outcome! But if trading is suspended then retail investors lose out.
So how can someone buy the stock, if at all!
Since there are no sellers on stock exchange since June 2019, there are only 2 options available for buying its shares:
- Wait everyday for someone to sell a stock. Someone might need the money or might need to sell for some reason. A highly unlikely scenario but if you really want to then go ahead.
- Find someone outside the share market and do an offline transfer. Now this is highly not recommended as there are lot of risks involved and you never know you will get anything for the shares.
- Get together with other share holders and try to move SEBI/HC again and see if there is any success.
- Get together and appeal to the promoters to buy back stock at a reasonable price or do relisting after price discovery.