Analysts attribute this to a couple of reasons.
First, there is a buzz relating about the addition of a ninth IPL franchise, which can add to the revenue of the teams. Secondly, ace investor and Dalal Street veteran Radhakishan Damani is said to be increasing his stake in the company gradually.
RK Damani held 2.39 per cent (73,69,263 shares) of the company as of March 31, 2019. His shareholding increased by 55 basis points to 2.94 per cent (90,69,263 shares) as of March 31, 2020.
A couple of dealers told ETMarkets.com on the condition of anonymity that Damani has been constantly increasing his stake in the company, which will be reflected in the next annual report.
Unlisted companies do not publish their shareholding details on a quarterly basis like mainstream companies do.
Life Insurance Corporation of India (LIC) holds a 6.04 per cent stake in the company and that stake has been constant all through this period.
MS Dhoni-led multi-time IPL champion CSK has been a proven multibagger in the unlisted space. The stock has rallied some 400 per cent in less than two years to Rs 48-50 from Rs 12-15.
Off-market dealers are still bullish on the stock, and see up to 100 per cent upside from current price by the next IPL season. They swear by the fundamentals of the stocks.
Sandip Ginodia, CEO of unlisted share dealer Altius Investech, said the company has very sound fundamentals and cheap valuations. “Despite having a poor IPL season and economic downturn, it has been able to hold fort,” he said.
“The addition of a new IPL team is on the cards, and it will be valued very highly," he said. "If the ninth team is added to the cricket fiesta, the number of matches is likely to be increased leading to a surge in revenue,” he said.
If one were to go by the market buzz, the ninth team is likely to be valued at around Rs 3,000-3,500 crore, whereas CSK is currently valued at almost half of it. The rumours are that Ahmedabad is going to be the base city for the new team and Adani Group and RPG Group could be key contenders to own it.
“CSK has no listed or unlisted peer in the domestic market, as it is only a sports franchise traded as a stock. Thus, the fair value of this stock remains undiscovered so far,” Ginodia said.
The latest TAM AdEx report showed the tally of advertisers and brands for IPL13 grew by 5 per cent and 3 per cent, respectively compared with the previous season.
With 92 categories, 115 advertisers and 249 brands this season, IPL13 broke its own records both in terms of advertisement revenue and viewership.
Abhishek Chaturvedi, Partner at Ultimate Wealthowl, said the success of IPL amid a pandemic will add value to the franchise. He sees decent upside for the stock ahead of the auction of the proposed new team ahead of the next IPL season during April-May.
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4 Comments on this Story
Ganpat Singh Bhati6 days ago
CSK is owned by India Cement Company and when CSK was made a separate pvt ltd company, the shareholders in India Cement were allotted prortionately shares of CSK free of cost. So it may not be correct to criticise LIC for their holding of CSK shares. On the contrary it is adding to LICs portfolio value without new investment.
james7 days ago
Fuc*ing news ..Is it worth reading at all ? LIC collecting money from Poor hard working middle class employees and investing in a Sham comapany like CSK which is mainly involved in money laundering ???? this is the " Idea" of a Comapny built on teh Values of Sardar Patel and Sghastry of India ??? What a joke this country has become ...A true Banana Republic ??? At teh end LIC cannot give more than 5 % Bonus on investment !!! With 10-12% inflation the very value of teh money is eroded ....An elderl;y person will curse LIC till his death for Sure !!! ank any person above 60 he will tell what LIC has done to them!
Amalesh Bhattacharya7 days ago
living in mumbai not investing in property trying IPL investment is praise worthy