IPL 2020: Chennai Super Kings receive 100% gain in valuation

CSK trading at Rs 30 per share at a market value of Rs 1,000 crore in unlisted market.

CSK's brand value of INR 732 cr is second only to MI's 809 cr RupeesThree-time Indian Premier League Champions, the Chennai Super Kings maybe just behind in the number of titles wins than Mumbai Indians, but the team is scoring high on the unlisted markets as it saw a 100% gain in its valuation over the past one year.

CSK, as it is popularly known, has seen its valuation more than double in the past one year on expectations that the country’s first listed cricketing entity will fetch an even greater premium when shares are eventually sold to the public.

CSK is now trading at Rs 30 per share at a market value of Rs 1,000 crore in the unlisted market. Retail high-net-worth individuals are buying the currently unlisted stock.

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In November of 2017, Economic Times had reported that CSK shares were selling in the unlisted market at Rs 13-15 per share at a valuation of Rs 450 crore. Its valuation has risen by over 120 percent since then. CSK shares carry a face value of 10 paise. The company has Rs 3.1 crore paid-up capital.

India Cements employees holding CSK shares are unsure when the listing of the company would happen and, hence, are selling shares in the grey market to pocket the profit. This is more of a speculative investment than a fundamental investment. Retail HNIs fond of cricket are adding this in their portfolio as it is also a low price item,” said Abhenav Khettry, MD, Vyana Wealth.

At the end of March 2019, CSK recorded a profit of Rs 111 crore against a loss of Rs 52 crore during the same period last year. It had posted revenue of Rs 418 crore.

In 2015, India Cements, the owners of Chennai Super Kings, demerged the franchise and to a wholly-owned subsidiary. Later, the entire CSK holding was transferred to the shareholders' trust and distributed a part of the shares to non-promoter shareholders of the company.

Duff & Phelps conducted an IPL brand valuation in 2019 and according to that, CSK brand is valued at Rs 732 crore, only second to the Mumbai Indians brand, which was valued at Rs 809 crore. Kolkata Knight Riders (KKR) brand was valued at Rs 629 crore while the entire IPL brand carries a valuation of more than Rs 48,000 crore ($6.8 billion).

Amongst the international sports clubs and teams, Manchester United has a market cap of $3.12 billion (Rs 22,269 crore). Juventus, the largest football club in Italy, is trading at a market capitalization of $1.77 billion (Rs 12,620 crore) and has fetched annual negative returns of nearly 22 percent.

(economictimes.indiatimes.com inputs)

 
 

By Jatin Sharma - 29 Jan, 2020

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