New IPL teams add to CSK scoreboard, stock zooms in the unlisted market

New Delhi: The entry of two new teams to the upcoming edition of the Indian Premier League (IPL) has ignited a spark in the stock price of Chennai Super Kings (CSK) in the unlisted market.

The stock was trading at Rs 110-120 in the previous week but it has now shot up to Rs 210-220 after the announcement of the two new teams. The scrip was trading at Rs 90-100 a month ago in the informal market. The recently crowned champion of the latest edition of the IPL has been a money compounder for its shareholders. The stock price has soared more than 1,500 per cent in just three years, from the level of Rs 12-15 in November 2018. Sandip Ginodia, CEO, Altius Investec, said the counter could see a 10 per cent move on either side following the IPL win.

Sanjiv Goenka-owned RPSG Group has picked up IPL’s Lucknow franchise with an over-Rs 7,000-crore bid. CVC Capital bid Rs 5,625 crore for the Ahmedabad franchise. The BCCI had set Rs 2,000 crore as the base price.

Barring the two bid winners, more than 20 interested parties had picked up tender documents, and nine had submitted their final bids. The list included the Adani Group, the Glazer family that owns Manchester United, Allcargo Logistics and Ahmedabad-headquartered Torrent Group. The other bids were below Rs 5,000 crore, sources said.

The higher valuations of new teams has triggered the price rise in CSK, said Narottam Dharawat of Dharawat Securities, a firm dealing in unlisted stocks. "It's the only franchise whose shares are available, attracting strong buying demand."

The price rise has boggled the minds of all dealers. Sunil Chandak, Equity Strategist, Gennext Investrade, said the recent run up in the stock was beyond expectations. "The whole IPL sector is likely to be rerated. The media rights that will be auctioned in the coming months is the next big trigger for the league, and CSK should benefit from that too, as will the other teams," he added. According to media reports, the media and online streaming rights for the next cycle of IPL, which is 2023-2027, may be sold for $5 billion (about Rs 36,000 crore).

The Chennai-based franchise is marching toward becoming the first sports-based unicorn in India, with the market cap hovering around Rs 7,000 crore. The unlisted peer has raced past the valuation of its owner India Cements. The MS Dhoni-led franchise reported a profit after tax (PAT) of Rs 40.26 crore in 2020-21, which was 20 per cent less than the PAT of Rs 50.33 crore clocked in the previous financial year. Dalal Street veteran Radhakishan Damani and LIC are the key shareholders of the company. LIC holds a 6.04 per cent stake in the company, whereas Damani's stake is not disclosed in the company's annual report.

Ginodia said he expects Gautam Adani, the chairman of Adani Group, to acquire the Ahmedabad-based franchise from CVC Capital soon. "Owning an IPL team is a sense of pride and prestige. We anticipate this climax before the peripheral end," he added.