Chennai Super Kings stocks trading in off-market between ₹13 and ₹15 per share have put the company evaluation at around ₹ 450 crores as against the brand value fo $98 million (₹ 700 crore).
Brand CSK was valued at $98 million (₹98 crore approx) by American Appraisal India and Dufff and Phelps. The CSK shares for its ₹3.1 crore paid up capital carry a par value of 10 paise.
According to an Economic Times report, investors are lapping up shares the CSK-ownership entity Chennai Super Kings Cricket in off-market transactions. The shares in the CSK equity, transferred to the 94,000 retail shareholders of parent company India Cements earlier this week, have been changing hands at ₹13-15 apiece, states the report quoting four people who deal in unlisted stocks.
“Many investors who got CSK shares early this week were seen selling them off market between ₹13-15 per share,” Narottam Dharawat, a Mumbai-based broker who deals in unlisted shares has told ET. “Savvy investors are interested in buying CSK shares.”
“Nearly 4 lakh shares changed hands in the last two days at a price between ₹12 and ₹15,” ET has quoted Delhi-based unlisted shares trader Anil Goel as saying. “Shares are trading at lower level because of CSK’s tainted history.”
“There is a good demand for CSK shares in off market as it’s currently trading at a discount to its brand value,” said Sambhav Aggarwal, director, ARMS Securities, a Delhi-based firm dealing in unlisted shares. “On Thursday, shares were traded at around ₹14 per share.”
The transfer of the stocks to the retail shareholders is also being seen as a move to list the Chennai Super Kings Cricket in the stock market. However, people privy to the matter have reportedly said that this may not happen immediately.
The $450 valuation for the reigning and three-time IPL champions is not just below CSK’s brand own value but also much lower than the other team ownerships in the league. JSW Sports’ acquisition of the Delhi Daredevils 50% shares from the GMR Group for a reported ₹550 crore puts the Delhi IPL team’s stock value at ₹1,100 crore.
Experts attribute CSK’s lower values to their tainted past that has kept the Yellow Lions out of the IPL action for the 2016 and 2017 season, and the fact that the share owners at present get no immediate or exit option to dilute their stocks.
Both teams served their bans, sitting out the 2016 and 2017 seasons and returning to the tournament this year with CSK winning it.
For the year ended March 2016, CSK had reported a turnover of ₹171 crore and net profit of ₹ 13 crore.