The valuation of Chennai Super Kings at ₹5 lakh is a non-issue, said N Srinivasan, Vice-Chairman and Managing Director, India Cements, which owns the Indian Premier League franchise.
Addressing media persons after releasing India Cements’ quarterly results, he said the claims of under-valuation were not relevant as the stake was being redistributed only among the existing shareholders.
The valuation is purely the share capital of the company, he said.
India Cements has transferred the franchise rights to Chennai Super Kings Cricket Ltd, a subsidiary, at a Net Asset Value of ₹7.83 crore as of March 31, 2015. India Cements’ shareholders will get a proportionate stake in the subsidiary making CSK the first of the eight IPL franchises to be widely held.
Srinivasan said the regulator, The Board of Control for Cricket in India, has approved the transfer on the condition that the parent company guarantees CSK Cricket’s compliance with the franchise agreement.
This is in line with the decision of February 23, 2015, when the Board decided to transfer the entire holding in the franchise — 50,000 shares of ₹10 each to India Cements Shareholder Trust, which is responsible for further distributing the shares. Three independent directors in India Cements have been made trustees.
The promoters’ shares will be allotted to another Trust set up for the benefit of former cricketers of India Cements.
Company officials said in 2014-15 the revenue from CSK was about ₹160 crore which was primarily from the seventh edition of IPL. According to information available on the BSE, over 70 per cent of the shares in India Cements are with public. The promoters and promoter group hold 28 per cent. Srinivasan himself holds a 0.14 per cent stake with the balance with holding companies and other individuals.