Unlisted Shares of Chennai Super Kings

Below is the article, we wrote for Money9.com.

Yes, you read it right! You can also become an owner of Chennai Super Kings by investing in its unlisted shares. There is a market for shares which are not listed on stock exchanges but are traded over the counter- ‘Unlisted Market’.

Just like the consistent performance of MS Dhoni led team on-field, the unlisted shares too are outperforming with a significant strike rate. The unlisted shares started trading in the second half of 2018 at Rs 14-15 apiece, which is now trading at Rs 75-80 apiece, implying a market cap of almost Rs 2,300 crore – that is a whopping 470% rally in just less than 3 years!

The Covid-19 pandemic hit last year just before the onset of IPL and even this year, the second wave of the virus is spreading havoc across the nation. Even in such difficult times, BCCI has successfully organised the tournament. Due to matches being conducted in empty stadiums, the revenues of teams have taken a hit in segments like ticket sales and merchandise sales. According to Duffs & Phelps’ Annual IPL Brand Valuation report, Chennai Super Kings has witnessed a fall of 16.5% in its brand value. The brand value dipped to Rs 611 crores in the year 2020 from Rs 732 crores in 2019. Even though the revenues have taken a hit in different segments, the broadcasting and sponsorship revenues remain to be driving factors.

The Path Ahead

The ongoing vaccination programme should help in ensuring that things get normalised till the next season. Hence, the revenues from the pandemic-hit segments should get back again. The upcoming auction of two new IPL teams should be a big trigger to watch which may re-rate the stock in the unlisted market. The unconfirmed reports indicate that the new teams are likely to be valued at a base price as high as Rs 2,000-3,000 crore. The craze for cricket and especially, IPL, looks enchanting.The promoters of CSK- the India Cements Group have versatile experience in managing the cricket team. The presence of marquee investors in CSK boosts the investors’ confidence. According to the shareholding data as on March 31, 2020, LIC and Radhakishan Damani hold 6.04% and 2.94% stakes, respectively in the company.

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