Tue, 29 Nov 2022

IPL saw a halt for six straight months before finally occurring in March 2022. While the India Premier League saw a pause on the field, it saw incredible growth in the share market. Due to the pent-up demand, IPL was bound to enjoy a larger audience; furthermore, Chennai Super Kings is the only league team offering its shares to the general public. Per the leaderboard, CSK might be facing an off-season on the field; however, the unlisted shares of Chennai Super Kings are enjoying their life.

Currently, the unlisted shares of CSK hold a price range of ₹ 210 - 215 in the market. Further, the experts anticipate a more significant surge shortly. According to the reports by Kotak Securities, CSK is currently experiencing its all-time high, without more than double growth in the last few months and quadrupled growth in the previous two years. In addition to it, experts also suggest that the price might reach the target of four digits. On the contrary, many still find the growth of CSK share price to be "unrealistic."

Initially, the team was owned by India Cements; however, CSK demerged from the said firm. While some might believe that the demerging will act as a setback for the team, in reality, the decision is proving itself to be the absolute best for the team. Chennai Super Kings started trading its share at a price of ₹ 12 - 14, but with time the price evolved with a growth of 1700% that too, in less than four years.

Furthermore, active financial advisors and investors believe that one more IPL title for defending the champions or replacing batsman or bowlers or the retirement of captain Mahindra Singh Dhoni (who renounced his captaincy from International cricket) has not affected the unlisted share price of the team. The high valuation of the team is already a stunning benefit for the team's future; the improvement of on-field importance is just an additional advantage. Investors and dealers worldwide were keen on the media rights cycle regarding the team, including both TV and digital streaming.

What Set Off The Sudden Interest In Chennai Super Kings?

The global valuation and investors anticipated the brand value of IPL at $ 6.8 billion by the end of the 12th season. This amount is more than twice the calculated valuation in 2014 at $ 3.2 billion. The growth in valuation was a major kickstart for every IPL team to experience a boost in their brand value which further mirrored in the on-field performance. Among all the teams, Chennai Super Kings bagged the most advantage since it is the only team offering public shares.

Apart From CSK, Mumbai Indians, owned by Reliance Industries, is the most-valued team in the Indian Premier League with an estimated valuation of ₹ 809 crores. However, Mumbai Indians are entirely held by the parent firm - Reliance; a series of events opened the gates for the unlisted share market for CSK (the first sporting team to open its shares to the general public).

In 2015, when India Cements entirely demerged from Chennai Super Kings, all its shares and stakes were transferred to India Cements shareholders' trust, which is currently the largest shareholder CSK at 30.86%. Moreover, upon the demerger, every shareholder of India Cements became a shareholder in CSK. A statement released by the CEO of Altius Investec (a leading firm dealing in pre-IPO shares), Sandip Ginodia, reveals that Chennai Super Kings has covered all the grounds yet is trading at a discounted price when compared with global franchises.

Another reason for promoting the surge in the unlisted share price of CSK is that IPL is a niche tournament. In simple words, it means that IPL had no shortage of money, and thus, it remained unaffected by global inflation, epidemics, wars or other volatilities. Since Chennai Super Kings gained major valuation in IPL, the team also enjoys the said benefits of IPL. The best example to support this is the after-tax profit price of the team, i.e., ₹ 40.26 crores, where the income was valued at ₹ 247.83 crores.

The Way Forward For IPL In The Share Market

From the above information, it can easily be deduced that the future of IPL is bright in terms of share market. Moreover, equity strategists such as Sunil Chandak (Gennext Investrade), support the anticipation while relying on the expected auction. The auction raised approximately ₹ 50,000 crore and more as the number of matches increased. In addition to it, BCCI set a base price for 2023-27 IPL media rights at ₹ 33,000 crore.

Even though the majority of factors are in favour of an increase of IPL, further benefiting CSK, the fall in viewership is a significant concern for the BCCI. If the TV rating is set back on track, there is a stop for the share price of CSK.

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