Dreamt of owning an IPL team? - Now you can buy Chennai Super Kings shares


by 5paisa Research Team Last Updated: 2022-04-04T13:12:02+05:30

Founded in 2008, Chennai Super Kings is a franchise cricket team based in Chennai, Tamil Nadu which plays in the Indian Premier League (IPL) and is a wholly-owned subsidiary of India Cements. It is one of the most popular team, having won the IPL title four times, and has a strong brand value and highest winning percentage. 

Founded in 2008, Chennai Super Kings is a franchise cricket team based in Chennai, Tamil Nadu which plays in the Indian Premier League (IPL) and is a wholly-owned subsidiary of India Cements. It is one of the most popular teams, having won the IPL title four times, has a strong brand value and highest winning percentage.
 
It is the only sports team in India that is available to the general public for investing in it. Owing to its popularity and love from the masses, the team generates revenues from gate ticket collection, in-stadium advertising, and merchandise sales. The team earns the highest revenue from Media rights which contribute ~60% of the total revenue, followed by Revenue from sponsorship which makes up ~15-20% of the total revenue, and the least contribution ~10% comes from Ticket sales.

With its strong brand value and popularity, CSK has managed to sail through the tough waters during the pandemic by maintaining positive broadcasting and other indirect revenue streams. CSK is estimated to continue generating strong revenues from merchandise sales, sponsorships, portions of prize money and digital viewership revenues for FY21-22.

At present, CSK holds a valuation of Rs. 3,850 crores while the brand value is worth Rs. 47,500 crores and this value is expected to grow even further with recovery in the sports industry. 

The price of the unlisted shares zoomed from Rs. 65/share in Jan ‘21 to Rs. 130/share at present, reporting a 100% growth. With cricket gaining popularity across the globe, IPL is gaining traction as well which may increase the brand value of IPL and its teams by multifold. This along with CSK’s popularity, we can expect more upside to the share price and higher valuations which could make CSK worth billions. 
 

Financial Overview:
 

Particulars FY20-21 (in crores)
Revenue from Operations 247.8
Total Assets 316.2
Total Outside Liabilities 100.1
Equity Shares Outstanding 31
Net-worth 116
Total Income 59
PAT 40.3
   
Ratios  
Current Ratio 4.44x
RoE 18.63%
Debt to Equity 0.3
NP Margin 16.25%

 

CSK’s lower dependency on debt reflects on increasing cash flow which can be shared with the investors through dividends and increased book value. It has also managed to increase its Cash and Cash equivalents component by maintaining its liquidity which has led to improve its Current Ratio. 

Going forward, a strong management on and off field, coupled with recovery in the sports industry and CSK’s popularity, one can expect profit and revenue growth. 

The top shareholders list includes big names such as Indian Cements Shareholders Trust, Sri Saradha Logistics Private Limited, Life Insurance Corporation of India, ELM Park Fund Limited, Hirtle Callaghan Emerging Markets Portfolio, Reliance Capital Trustee Ltd, and Radhakishan S Damani. 
Top principal partners of the team are Myntra, India Cements, Gulf, British Empire, SNJ 10000, Jio, Nippon Paint, Astral Pipes, Equitas. The official partners of the team are Clear, BKT, Dream 11 and Starbucks Coffee.
 


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