Table of Contents

About the Company

Usually, the company operates as an investment business, and the profits from its investment portfolio serve as its primary source of income. It doesn’t diversify into other business sectors; it only works in the investing field.

This macroeconomic trend offers a good backdrop for the company’s investment strategy, providing plenty of prospects for greater profitability and capital appreciation, as the Indian economy continues to grow and develop.

The investment environment does, however, provide certain challenges. The biggest risk the corporation faces is the inherent volatility of the capital markets. Market fluctuations, recessions, and global financial instability might all lower the value of its investments. Being conscious of these risks, the business approaches investing with caution and procedure. It often consults with respectable and skilled portfolio managers who provide an in-depth understanding of the market and investments. These professionals assist in making educated judgments that support the organisation’s risk management strategy.

The company has put in place a strong internal control system that is appropriate for the size and complexity of its operations in order to protect its assets. The purpose of these controls is to guarantee accurate financial reporting, regulatory compliance, and the successful implementation of investment strategies.

The company owns substantial stock stakes in a number of well-known and up-and-coming businesses. One97 Communications Ltd., well-known for its flagship digital payments platform Paytm; Resins and Plastics Ltd., a producer of industrial resins; Asian Paints, a major player in the paints and coatings sector; and Brainbees Solutions Pvt Ltd, the parent company of well-known e-commerce brand FirstCry, are among its principal investments. The company’s dedication to creating a broad portfolio with stability and development potential is shown in these key investments.

Financial Takeaways:

The company’s exceptional financial success is demonstrated by its remarkable earnings per share (EPS), which are around INR 4,052. This is complemented by a strong Return on Net Worth (RoNW) multiple of 31.61, which demonstrates efficient utilisation of shareholder resources to generate profits.

Asian Paints Investment Post-Mortem

For the current fiscal year, the company reported a net profit before tax of INR 7,201.93 lakhs, a significant increase from INR 5,383.23 lakhs for 2020. There was a slight improvement in the net profit after tax, which was INR 5,488.66 lakhs as opposed to INR 5,459.12 lakhs the previous year. A yearly dividend of INR 15 per share is routinely paid out by the corporation to its shareholders.

Book value of Elcid Investments Share

The company’s considerable stake in Asian Paints is a high point of its investment portfolio. The investment’s remarkable capital appreciation was proven by its book value of INR 360 crores in 2021, but its market value had risen to almost INR 12,850 crores. The corporation owns 4.06,15,840 shares of Asian Paints. Elcid Investments’ share price is predicted to reach INR 6,40,880 per share on November 27, 2021, based on this transaction. The valuation represents the company’s fundamental strength and strategic direction for investment decisions.

Illiquid Stock

The company has a relatively low market capitalisation of about INR 20 lakhs, even though its intrinsic share value is around INR 6.4 lakhs. In sharp contrast to its intrinsic worth, the stock is currently trading at a pitiful INR 16.2 per share as of 2021. A total of 40,200 shares, or 20.1% of the total shareholding, are held by the company’s 229 retail shareholders.

The promoters made a failed attempt to delist the firm in 2011 with an offer price of INR 11,455 per share. Later, in 2013, SEBI issued a rule mandating that promoters own no more than 75% of listed companies. The promoters of Elcid Investments were forced to reduce their interest because they owned more than this amount.

For this, they came up with an OFS option and sold 4.75% of their stake at Rs 5000 per share.

These trapped retailers then tried to approach SEBI to enable a stock price discovery through a one-time call option mechanism. However, this, too, was a failed attempt. Then, to sort out this rare and extraordinary case, investors also reached out to the high court but got no solution.

In addition, here we are in 2021 when the stock trades at just Rs 16.2. Apparently, it is highly unlikely that the stock would be available for sale in decades going ahead!

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