The unprecedented rise in the value of Elcid Investment stocks in the Bombay Stock Exchange (BSE) on October 29 has led to mixed sentiments.

On one hand, there is obvious enthusiasm for Elcid and similar scrips - which could make investors' wealth burgeon overnight.

On the other hand, concerns are being raised over unscrupulous elements engaging in untoward activities, like pump-and-dump schemes.

The Elcid rally

Before October 29, 2024, Elcid Investments - named after the moniker that 11th-century Spanish knight Rodrigo Díaz de Vivar earned apparently for his respectful treatment of opponents on the battlefield - was a little-known scrip. 

It is a non-banking financial company (NBFC) that, instead of running a business, primarily holds shares in other companies.

Its holdings were said to be worth Rs 5.85 lakh crore, and yet its stock price has meandered around the Rs 3 mark since 2011.

So, what changed? The Securities and Exchange Board of India (SEBI) stepped in. 

The market watchdog had been noticing that stocks of entities like Elcid Investments were trading at a far lower price than they should, which it felt was causing investors to be misled.

Thus, it told the BSE and the National Stock Exchange (NSE) to conduct a special call auction, which was expected to let investors and the market pinpoint a closer-to-true price of such undervalued entities.

Thus it was that Elcid -a penny stock until recently - suddenly rose in price to Rs 2,36,250 by the close of trading on October 29.

That increase of around 67 lakh percent - yes, you read that right - made it the costliest stock in the market, leaving previous leader MRF far behind.

It also meant that Elcid's market cap stood at Rs 4,725 crore at the end of the day's trading.

Subsequent hunt for multi-baggers

The Elcid rally has since triggered a scurry in the market - especially among retail traders - to pinpoint such stocks that could multiply their investments manifold.

It may be noted that Elcid was not the only entity subjected to the special call auction and to undergo relisting.

Others included - but were not limited to - Nalwa Sons Investments, TVS Holdings, Kalyani Investment Company, SIL Investments, Maharashtra Scooters, and Pilani Investment and Industries Corporation.

Their relisting made their shareholders a pretty penny. And the market sentiment seems to be that these stocks are still undervalued to some extent, which could trigger a buying spree on Monday, November 4, despite their fat price tags.

Meanwhile, there are also concerns that some unscrupulous actors might want to cash in on the trend with bad intel to dupe investors - especially the less-informed ones.

Indications of this are rife on social media, where certain "experts" - several of them not registered as brokers with the Reserve Bank of India - have already been posting "tutorials" on how to identify multi-baggers like Elcid.

This, despite there apparently being no clear sign that such stocks might exist.