Chennai Super Kings Cricket Ltd., the owner of one of India's most successful T20 cricket league teams, saw its profit fall by half in the last fiscal as revenue shared by the cricket board fell.
Net profit of the company, spun off from The India Cements Ltd. three years ago, fell 54% to Rs 50.3 crore in 2019-20, according to the cement maker's annual report. Revenue fell 15% to Rs 356.5 crore.
The owner of the eponymous team—the three-time winners and five-time runners-up of the Indian Premier League—received lower income from grant of central rights from Board of Control for Cricket in India in 2019-20. That's because the Mahendra Singh Dhoni-led team finished second in 2019 and were the champions in 2018. The winners get more than the runners-up.
The BCCI suspended IPL 2020, season XIII, in April-May as India imposed a lockdown to contain the Covid-19 pandemic. The world's richest cricket body is now looking to conduct the league in the U.A.E. in September.
CSK, according to the annual report, will hold its shareholder meet towards the end of the month to approve, among other things, increase in authorised capital of the company for a possible conversion of optionally convertible debentures.
The company had raised Rs 65 crore by issuing 8% OCDs at a face value of Rs 10 lakh each to IL&FS Financial Services in January 2018 for working capital and general corporate needs. These OCDs were due for redemption at par at the end of 60 months from the date of issue, with an option to convert into equity shares after two years.
The terms gave the non-bank lender the option to convert the debentures into equity shares at Rs 9.12 apiece, including a premium of Rs 9.02 apiece, giving IL&FS Financial Services 18.78% stake in CSK on a fully diluted basis.
Shareholders
The shareholding pattern of CSK saw some churn during the last financial year. Many of the mutual funds which held stake in the IPL team exited due to restrictions on holding shares of unlisted companies.
Mutual fund stake fell from 3.51% at the beginning of the year to 1% at the end of the financial year, according to the annual report. Foreign institutional investors and insurance companies maintained their stake. Institutions held 63.4% with LIC being the single-largest investor at 6.04% as of March.
Radhakishan Damani, billionaire investor and founder of Avenue Supermarts Ltd., the operator of DMart stores, increased his stake from 2.39% at the beginning of the fiscal to 2.94% at the end.
Nearly Rs 1,300-Crore Valuation
Shares of CSK have been seeing brisk trading in the over-the-counter market. The demand jumped further after Damani increased stake in India Cements triggered speculation he would increase his holding in the team as well. CSK trades at Rs 40-42 apiece in the market, giving the IPL team a valuation of Rs 1,230- 1,300 crore.
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