If you are thinking that Madras Rubber Factory Limited (MRF Ltd) stock is the most expensive stock in the Indian market, then you are wrong, because recently one stock has left behind MRF and become the most expensive stock in the stock market Indian. .It’s already over. Shares of tire manufacturing company MRF are trading at Rs 1.2 lakh. While this stock of a small cap company has entered the market at double the price of MRF. Interestingly, in July this share was only Rs 3.21.
The small cap stock that has outperformed MRF stock is Elcid Investment Ltd Share, which relisted on BSE on Tuesday, October 29 at a price of Rs 225,000, but during the day its stock rose. and reached Rs 2,36,250, bringing its total market capitalization to approximately Rs 4,800 crore.
The circular was issued on October 21.
The BSE circular issued on October 21 said that selected investment holding companies will be relisted through a special auction mechanism to determine the price on Monday. After the special provision, the effective rates were settled on Tuesday, October 29. Alcide Investments was one of them. Other companies included names like Nalwa Sons Investment, TVS Holdings, Kalyani Investment Company, LIC Investment, Maharashtra Scooters, GFL, Haryana Capfin and Pilani Investment and Industries Corporation.
The delisting proposal had failed
The promoters of Alcide Investment had proposed its delisting at the base price of Rs 1,61,023 per share. For this purpose, a special proposal was also presented. However, this proposal failed due to the lack of a majority of public shareholders.
Why are stocks so expensive?
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, worth about Rs 8,500 crore at last close. This is the only reason why this stock is selling at such a high price in the stock markets.
Shares rose from Rs 3-4 lakh to Rs 2.35 lakh in a day
Hitesh Dharawat of Mumbai-based Dharawat Securities said Alcid Investments has been the talk of the town on Dalal Street due to its stake in Asian Paints. The stock price has risen directly from Rs 3-4 a day ago to Rs 2.35 lakh. However, the book value is still higher than the current share price.
There has been no change in the stock for a long time.
Despite trading at Rs 2.36 lakh per share, the stock is still trading at a discount of around 45 per cent to the intrinsic share price of Rs 4.25 lakh per share based on its stake in Asian Paints. Before Tuesday’s trading of 190 shares worth Rs 4.33 crore, there had been little change in the stock in recent years.
investing money is riskier
Kranthi Bathini, head of equity strategy at Wealthmills Securities, said the business of such companies is to own shares of other companies that dictate share prices for investors. Investing money in these types of companies is based entirely on the risk appetite of individuals, but it must be taken into account that there may be liquidity risk in these companies.
You must know the way out
He said investors should look at the company’s cash flow and nature of business before investing. It makes sense to invest money only if it suits your risk profile. Such companies may have some value, but investors need to know how to exit them so as not to lose money later.
(Note: Before investing in any stock, definitely seek the help of a financial advisor.)
