Did You Know: GCM Securities gained more than 4000% since May, 2013

On the BSE SME Exchange there are around 70 companies and they trade frequently. GCM Securities is a company which has gained over 4000 percent since its listing in May 2013. The market cap of this company is Rs 1650 crore and the current market price is around Rs 86.They went for a stock split; ex-date was on October 28. Now the face value after adjustment is nearly Rs 86 otherwise you have to count it around Rs 860. The stock has actually gained nearly 4225 percent since listing in May 4, 2013. Issue price was Rs 20 per share. On the date of listing on BSE SME the company raised only Rs 13 crore. Now you can imagine a company with came into the market for raising Rs 13 crore is having a market cap of nearly Rs 1650 crore right now. The networth is very small for this company, only Rs 23 crore. It was incorporated in 1995. They say on their website that they are engaged in stock broking services and making investment in companies. Inder Chand Baid is the promoter director for the company having experience of more than 40 years.GCM Securities is a group company of Global Capital Markets and Infrastructure which is actually also listed on BSE. However this Global Capital Market is having a market cap of only Rs 50 crore. So, the parent company is having a market cap of Rs 50 crore but this company GCM Securities is having a market cap of nearly Rs 1650 crore.Now you go into the financials which is the most important thing. Financials doesn’t convey the message that this company should be commanding this kind of market cap. The last three years put together the company has done sales less than Rs 20 crore. It was in FY14 they did a sale of Rs 13 crore, FY13 nearly Rs 6 crore, FY12 nearly Rs 72 lakh and if you have to watch out for the profit after tax for the last three years put together the profit is around Rs 50 lakh only.So, this company is trading around 3000 times price earning multiple, if you have to just see on a price to earning multiple basis for the last year. So, nothing explains the kind of run up the stock has seen. Also the major sales for the company comes from non-operating income or from other operating income. It was mentioned in the annual report that the net sales in one of the year was actually negative and it was only compensated by other operating income.The shareholding pattern too is very interesting for this company as it is for these type of companies. Share outstanding around 1.9 crore shares, promoter holding 41 percent, total number of shareholders are only 1081. Out of it 875 individuals own 48 percent of the company. So, the promoters and 875 individuals actually own nearly 90 percent of the company. So, it is very closely held in terms of ownership. So, clearly the stock run up of 4000 percent since its listing is really amazing.So, these 875 individuals does this list consists of the usual suspects, the ones that you have been talking about in your other Did You Know's? I checked for the details, none of these investors actually own more than 1 percent stake also in the company. So, there was no name which was mentioned on the BSE exchange at all. It is very scattered among all these people but it has been happening for a long time. The stock actually trades a lot but the way the stock has been just moving up and then the stock split happened now it is trading around Rs 85. Any investments that this company has which could be the reason why the stock could be having this kind of value?The non-current investments as they say on the balance sheet is only Rs 21 crore. It doesn’t justify at all the kind of Rs 1600 crore market cap that the company is commanding.