Chennai Super Kings: 800% return in 3 years! Unlisted Damani stock has analysts hooked

New Delhi: Despite Indian Premier League (IPL) having a lukewarm season in 2020 due to the Covid pandemic, unlisted shares of Chennai Super Kings (CSK) are on a high in off-market trade.

Analysts and dealers in the unofficial market attributed the buoyancy to the 14th IPL edition that kicks off on April 9.

Ace investor and Dalal Street veteran Radhakishan Damani held 2.39 per cent (73,69,263 shares) stake in the company as of March 31, 2019. His shareholding increased by 55 basis points to 2.94 per cent (90,69,263 shares) as of March 31, 2020.

Some dealers in the unofficial market said Damani is said to be increasing stake in the company gradually. However, they could not ascertain the quantum of his recent purchase, which is likely to be reflected in the company’s forthcoming annual report.

Life Insurance Corporation of India (LIC) holds a 6.04 per cent stake in the company, and that stake has been constant all through.

Shares of CSK, the MS Dhoni-led multi-time IPL champion, have been a proven multibagger in the unlisted space, having rallied up to 800 per cent in less than three years from Rs 12-15 in November, 2018, to trade at Rs 80-85 on Monday.

Off-market dealers felt there is more steam left in the stock, and expect it to surge to three digits by next season, marking an up to 20 per cent upside from current level. They swear by strong fundamentals of the stock.

Sandip Ginodia, CEO of unlisted share dealer Altius Investech, said the company had very sound fundamentals and cheap valuations. “Despite having a poor IPL season and the economic downturn in 2020, it has been able to hold fort,” he said.

“The addition of a new IPL team will add to the CSK valuation,” he said. “If a ninth team is added to the cricket fiesta, the number of matches is likely to be increased, leading to a surge in revenue,” he said.

The latest TAM AdEx report showed the tally of advertisers and brands for IPL13 grew by 5 per cent and 3 per cent, respectively, since the previous season. IPL13 broke records both in terms of advertisement revenue and viewership.

“The addition of new teams will increase revenue prospects and valuation of the existing teams. CSK will reap the benefits of the same,” said Dinesh Gupta, Co-Founder, UnlistedZone.

“The stock behaviour might appear seasonal, but it is an evergreen performer, having surged 25-30 per cent since previous edition,” Gupta said. “It still has potential to move northwards after this season, as the revision of deals is possible.”

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