Buy Sell Chennai Super Kings (CSK) Cricket Unlisted Shares – CSK Share Price 2022

Chennai Super Kings Cricket Ltd profile

CSK was formed in 2008. Mahendra Singh Dhoni is Captain and Stephen Fleming is Coach. CSK returned to the league in 2018 after serving a two-year suspension from the IPL since July 2015 for the alleged involvement of owners in IPL betting case.

SECTOR : Consumer Discretionary
INDUSTRY : Recreation Facilities & Services
SUB-INDUSTRY : Entertainment Facilities
FOUNDED : 19 December 2014
ISIN : INE852S01026
Corporate Identification Number (CIN): U74900TN2014PLC098517
PAN No : AAFCC8730K
Registered Office : “Dhun Building”, 827, Anna Salai, Chennai – 600002

Chennai Super Kings’ unlisted stock and valuations continue to climb. The expansion of the IPL—with two new teams in 2022—and skipper Mahendra Singh Dhoni building CSK’s core for upcoming seasons, point towards a stronger franchise, with or without the cricketing icon. For millions of CSK, and Indian cricket, fans, Dhoni and CSK are symbiotic and almost synonymous brands.

Financials of Chennai Super Kings Unlisted Shares  

Brand Value by Duff & Phelps

The brand value of CSK is huge. Furthermore, CSK is the most valuable franchise in the IPL. Hence, CSK share is in high demand as its owner of a growing IPL brand.

chennai super kings shares price seem to be trading at lower levels. In 2018, JSW Sports acquired 50% ownership in Delhi Capitals (erstwhile Delhi Daredevils) for Rs. 550 crores, valuing the franchise at Rs. 1100 crores which roughly translates into an EBITDA multiple of 35.5x. Based on this range of EBITDA multiple can be in a valuation range of Rs 3200 crores to Rs 7300 crores to CSK.

IPL’s brand value rose 19% to $6.3 billion in 2018 as per Duff & Phelps. Due to, renewed broadcast deal, a controversy free tournament and the presence of marquee players across franchises. Duff & Phelps is a New York-based corporate finance advisory firm.

Track record 

CSK has the highest winning percentage (59.69 percent) among all IPL teams, ahead of Mumbai Indians (58.82 percent) and KKR (51.67 percent).

CSK can become sports unicorn soon. CSK is the only IPL cricket franchisee team stock whose shares are on offer in the unlisted market. The stock has surged in the unlisted space. CSK’s enterprise value (EV) is close to about Rs7,200 crore ($960 million), approximately 19x of its FY21 revenues. Prominent football clubs’ EVs, as listed in the Forbes Most Valuable Sports Teams of 2021, are in the range of 6-7 times their FY21 revenues (Manchester United’s EV, for example, is listed as $4.2 billion and its revenues are about $643 million annually; the numbers are similar for teams such as Liverpool, Manchester City and Chelsea).

CSK might be planning for an IPO at some stage also drives that higher price expectations, much like it happened during Manchester United’s IPO. chennai super kings share price will see major rerating once IPO plan is announced.

High-profile domestic investors continue to hold on to the CSK stock, including LIC and hypermarket chain DMart owner Radhakishan S Damani. Some foreign funds such as ELM Park Fund and Hirtle Callaghan Emerging Markets fund hold 4.99 percent and 2.87 percent respectively in CSK, as of FY20.

The sustained presence of institutional investors has made retail investors confident about CSK, despite a certain amount of volatility in the stock. CSK’s scrip has hit all time high of Rs 240 levels in February 2022.

CSK Revenue Model:

CSK generates revenues from gate-ticket collection, in-stadium advertising, and merchandise (T-shirts, mugs, home décor) sales. Maximum revenues come from broadcasting rights which analysts say contribute about 60 percent of the total revenue, followed by around 20 percent from sponsorship and about 10-15 percent from ticket sales.

CSK is estimated to continue generating strong revenues from merchandise sales, sponsorships, portions of prize money and digital viewership revenues for FY22. Going forward, with 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.

Biggest expense for franchisees is player fees. The total amount that can be spent by a franchisee is capped by BCCI to ensure healthy competition. The franchisee that manages operating expenses well has a higher profit margin. With its highly professional management, CSK is able to generate a higher profit margin.

Key Management:
B. Kalyanasundaram – Director (Engineering Graduate, Former Indian First Class Cricketer).
K.S. Vishwanathan – CEO (Engineering graduate, held leadership position at Wipro, Dell, Azim Premji Foundation).
Promoters – India Cements (N.Shrinivasan)

Top 10 shareholders of CSK:
India Cement Shareholders Trusts 30.9%
Life Insurance Corporation on India 6.0%
Sri Saradha Logistics Pvt. Ltd. 5.7%
Elm Park Fund 5.0%
HIRTLE Callaghan Emerging Market Portfolio 2.9%
Reliance Capital (Various funds) 2.5%
Radhakishan Damani 2.4%
Dreyfus International Fund 1.8%
The Boston Company 1.7%
Dimensional Emerging market Fund 1.7%

Mr. Radhakrishna S. Damani has increased his stake in CSK from 2.39% to 2.94% in March 2020.

Global sports teams

CSK is trading at deep discount compared with other international sports franchise stocks. As per Forbes, there are currently 52 sports teams across the world worth at least $2 billion, up from one in 2012. The value of sports teams have skyrocketed on the back of ballooning media rights deals and more owner-friendly collective bargaining agreements that restrain player costs. Valuation of top 10 teams globally is very high.  The teams include Dallas Cowboys – Football, New York Yankees – Baseball, Real Madrid – Soccer, Barcelona – Soccer, New York Knicks – Basketball, Manchester United – Soccer, New England Patriots – Football, Los Angeles Lakers – Basketball, Golden State Warriors – Basketball, New York Giants – Football.

India Cements Demerger and past history of CSK 

India Cements bought the CSK franchise for Rs 364 crore, or $91 million. The amount was paid in 10 instalments over 10 years. i.e. Rs 36.4 crore each year till 2017-18.

After its demerger from India Cements, 94,000 retail shareholders were allotted CSK shares on a 1:1 ratio, each having a face value of Rs 0.10. Record date was 9 October 2015.

Chennai Super Kings CSK owner in 2022 is the Chennai Super Kings Cricket Limited. The Board of Cricket Control in India or the BCCI announced a franchise based T20 domestic league in India in 2007.

CSK Owner is N Srinivasan. Indian industrialist N. Srinivasan is the Managing Director of India Cements. Many cricket fans would know that Srinivasan has served as the chairman of the ICC and the President of the BCCI in the past.

Net Worth of Chennai Super Kings in 2022 – USD 104 Million

According to reports, Chennai Super Kings became the first Indian Premier League franchise to achieve the unicorn status last year. It has a market cap of INR 7,600 crore, with the share price in the grey market trading being between near Rs 200. CSK has a net worth of roughly USD 104 million, which equals to almost INR 732 crore.

Key risks 
1. Retirement of Dhoni, who has been an iconic leader.
2. Impact of overall economic slowdown on the advertising and sponsorship revenues.
3. Drop in performance and failure to qualify for play-offs will impact revenues.
4. Retirement of top any other star players from the squad.

Outlook

The bounce back of Dhoni and CSK is extraordinary, refuelling interest in the unlisted CSK stock, brand Dhoni and brand CSK. The introduction of two new teams into the IPL franchise—Ahmedabad (led by CVC Capital) and Lucknow (led by Sanjiv Goenka’s RG-SG Group)—is likely to boost valuations for the top performing teams in the coming years, including CSK, Mumbai Indians, KKR and Rajasthan Royals.

The share price of CSK will depend on how the performance of CSK team is in the IPL tournaments.

IPL has by far been the most successful sporting event in India, in which CSK has enjoyed its own pedigree. In the stock market too, CSK is enjoying its first mover advantage over seven other franchises. Csk share price is expected to rally as the game catches popularity across the globe. CSK’s stock value will continue to be driven by the brand it has built.

There is no listed peer comparable company of CSK. The company is said to have very sound fundamental and cheap valuation compared to its international players. As per several research analysis, the stock can command a valuation range of Rs 5000 crores to Rs 7500 crores. The fair value per share of CSK is Rs 85 at the lower end and Rs 190 at the higher end of the valuation range, leaving huge upside from the present share price.

The value of sports teams have skyrocketed on the back of ballooning media rights deals and more owner- friendly collective bargaining agreements that restrain player costs.

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