On MS Dhoni birthday, CSK investors worry over his retirement, IPL fate

New Delhi: As Mahendra Singh Dhoni celebrated his 39th birthday on Tuesday, investors in the off market for trading in unlisted shares had a worry to deal with: What happens to CSK shares in the unlisted space should the former Indian captain decide to hang up his boots!

The Coovid-19 outbreak has already cast doubts over the feasibility of this year’s edition of Indian Premier League (IPL). The Board of Cricket Control in India (BCCI) is making a last-ditch effort to try and see if the tournament can be held in the later part of the year.

As Cricket Australia has given up on ICC World T20 Tournament, the Indian board smells an opportunity to squeeze in the franchise-based tournament and exploring the possibility of holding it somewhere outside India.

These speculations have led to a consistent rally in the unlisted shares of three-times champion Chennai Super Kings (CSK) in last three months from Rs 22-24 to Rs 33-35, a neat 50 per cent jump.

Dealers in unlisted shares expect the stock to rise a further 50 per cent, if the tournament does materialise. The MS Dhoni-led CSK is one the most traded and demanded stocks in the unofficial market.

"If the IPL does take place this year, the scrip may rise to Rs 45-50 levels, considering the euphoria in the secondary markets and quality of the stock," said Dinesh Gupta of Unlisted Zone.

“MS Dhoni is one of the biggest reasons for holding up the CSK stock in the unlisted space. Many investors have bought the stock only because of Dhoni. If he decides to hang up his boots, it may see a 25-30 per cent correction,” he said.

On its part, the franchise is not sweating over the uncertainty around the IPL edition, as the unlisted entity has insured itself for up to Rs 70 crore. The entity managed to report a PAT of over Rs 111 crore at the end of March 2019.

Other analysts say IPL is as seasonal as mango, which is eagerly awaited. “The whole sporting fiesta completes in 45-50 days. In the case of in-gate tournaments, advertisement revenue will take a hit. Similarly, a shortened event will trim broadcasting revenues. However, there will be lesser expenses as well,” they pointed out.

Even if BCCI manages to hold the event, it is likely to be confined to fewer grounds and matches, which will reduce operating expenses.

“The franchise may lose some advertising, in ground and merchandise revenue. But something is better than nothing,” says Narottam Dharawat of Dharawat Securities, a Mumbai-based firm that deals in unlisted shares.

“After ace investor Radhakishan Damani hiked his stake in India Cements, it is anticipated that he might play a role in CSK management,” said Dharawat.

CSK was demerged from India Cements in 2016.

BCCI is eyeing a truncated in-gate (without spectators) IPL season in the September-October window, outside of India. UAE, Sri Lanka and New Zealand are the frontrunners to host the event.

The UAE has an edge over other contenders. While the Kiwi-land is Covid-19 free, the time zone difference and logistics support may go against it. Sri Lanka may lose out as retreating monsoon may create weather issues in the latter half of the year.