After 10x rally in 3 years, this unlisted ‘champion’ stock still has more legs

New Delhi: After a tepid season last year, the MS Dhoni-led Chennai Super Kings (CSK) is back in table-topper form in the new leg of the ongoing Indian Premier League (IPL) cricket tournament, and so are the unlisted shares of the franchise.

The stock has risen to the Rs 120 level in the informal market for trading in unlisted stocks, as the 14th edition of the T-20 league draws towards the final showdown.

That will be followed by the auction of two new IPL franchises by the end of this month.

Dealers in the unlisted market see the addition of the two new teams as the biggest near-term trigger, which they said can earn CSK a rerating. That is, even when the long-term story for the cricket play remains intact.

“BCCI officials are expecting the new teams to be bid around Rs 4,000 crore valuations, whereas CSK, a profit-making franchise, is available at Rs 3,300 crore,” said Sunil Chandak, Equity Strategist at Mumbai based Gennext Investrade.

The auction would be keenly tracked by the market participants, as CSK has a strong brand value, superior ticket and merchandise sales and money-making history, which is likely to earn the stock a rerating, he said.

BCCI on Tuesday extended the deadline for purchasing tender documents for the new Indian Premier League teams by five days till October 10. Ahmedabad, Lucknow, Guwahati, Pune and Ranchi are the frontrunners in the race.

Sandip Ginodia, CEO of the Kolkata-based Altius Investech, however, has a word of caution for investors.

“The valuations of CSK depend on what happens at the auction table. If the bids are placed below expectations, there might be some short term correction,” he said.

Shares of Chennai Super Kings have soared about 1,000 per cent since November 2018, when it was demerged from India Cements. Dealers said there is more steam left in the stock.

“If things fall in place for CSK, this multibagger may become a unicorn soon, but it will not happen overnight,” said Chandak of Gennext Investrade.

There is a buzz that a couple of top-notch peer franchise owners may sell their stakes, valuing the teams near $1 billion. However, ETmarkets.com could not verify this.

Chennai Super Kings had posted mixed numbers in the wake of the Covid pandemic. It reported a profit after tax (PAT) of Rs 40.26 crore for 2020-21, 20 per cent less than Rs 50.33 crore clocked in the previous financial year.

The Chennai-based entity reported a 29 per cent drop in income from operations in FY21 at Rs 247.83 crore against Rs 350.27 crore posted for FY2020.

Dalal Street veteran Radhakishan Damani and LIC are two key shareholders of the company. LIC holds 6.04 per cent, while Damani’s stake was not disclosed in the company’s annual report of 2021.



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