After the developments in the last few hours, unlisted shares of IPL franchise Chennai Super Kings (CSK) have nosedived some 30-odd per cent. The unlisted scrip was available at Rs 60-62 in off-market trade on Tuesday down from Rs 82-85 in mid-April, when the tournament had started.
Dealers of pre-IPO market said the kneejerk reaction was on the expected lines.
Sandip Ginodia, CEO of Altius Investech, a Kolkata-based firm that deals in unlisted shares, said the decision (to suspend IPL) was not surprising. “When the nation is facing the wrath of a lethal pandemic, sports and entertainment take a back seat,” he said.
“However, it is a short-term impact, as the tournament was halted only for some time,” he said. “It is likely to resume in the near future once things come under control. The fundamentals are still sound and intact,” Ginodia said, adding that he has a bullish view on CSK.
The stock of CSK, the MS Dhoni-led multi-time IPL champion, has been a proven multibagger in the unlisted market. The stock has rallied some 400 per cent in less than two years between 2018 and 2020 to trade at Rs 48-50 from Rs 12-15.
Rajesh Singla, Founder of pre-IPO consultancy firm Planify, said empty stands and kids at home resulted in low merchandise sales and were badly hitting the bottom line of CSK. “A pause or suspension of IPL will impact their revenues further from advertisers and associated brands,” he said.
“The good part is that such tournaments are usually insured. Last year they had insurance coverage for disruption, but we are not sure if the current situation or voluntary suspension is covered under the claims,” he said.
Business News Governmental News Finance News
Need Your Help Today. Your $1 can change life.