Everyone in India watches IPL and one of the most successful IPL teams is Chennai Super King (CSK). Throughout its IPL career, CSK has won the IPL trophy a total of 5 times in 2010, 2011, 2019, 2021 and 2023. CSK is tied with Mumbai Indians for the most IPL wins ever at 5. With a valuation of $212 million, CSK is the most valuable team in the IPL. This makes the team highly desirable for investors, especially seasonal investors.
But why do investors like to invest in CSK? How does it benefit the seasonal investors?
Seasonal investors are the people who buy a share with a pre-planned buy and sell date. They usually buy a team’s stock at the start of the tournament and then sell it at the end making a significant profit in the process. But why is CSK the best option for seasonal investors?
As we mentioned above, CSK is one of the two most winning teams in IPL history and it has a good reputation when it comes to performing in IPL. So if in the season, the team performs well then there are chances that the CSK share price would also increase as compared to what it was at the end of the year. The previous years’ reports show that Chennai Super King share prices always increase by the end of the season as during the season, CSK performs quite well which directly translates into better financial metrics, hence appreciating its share price. CSK is not a public company so it is not listed on any stock market but it offers its shares through the unlisted share market in the form of unlisted shares. In the market, the price of a share is directly dependent on the financial performance of a particular company or team.
How Does CSK Earn Its Revenue?
CSK earns its revenue from a variety of sources. Each of these sources contributes a said amount of percentage to the total revenue generated in a year. Most of the sources mentioned here are the most significant during a season. Some of the major contributors to CSK revenue are as follows:
A significant amount of CSK’s revenue comes from sponsorships and endorsements. As much as 15 to 20 percent of CSK’s revenue is generated through sponsorships. Some of the major sponsors of CSK are Gulf Oil, TVS Eurogrip, India Cements and Jio to name a few. Through these companies, CSK earn a substantial amount of revenue
Another perk of being at the top of a game is merchandise sales. If a team wins more than its merchandise then it is expected to have a greater sale. CSK being one of the most winning teams in IPL translates to more merchandise sales. CSK offers Caps, Jerseys, Bats and T-shirts to name a few. Revenue through the sale of merchandise increases significantly during the season as many people buy the merchandise to wear in the team’s matches.
This is the greatest source of revenue for CSK. broadcasting rights account for almost 60% of CSK’s total revenue. It includes the sale of media and broadcasting rights to television networks and other streaming platforms. It is estimated that CSK can earn as much as $620 million every year from 2023 to 2027.
Tickets And In-Stadium Ads
Another significant source of CSK’s revenue is the ticket sales in their event. The total gate (ticket sales, merch sales and in-stadium ads) in their events account for almost 10% of their total revenue.
The above-mentioned sources of revenue indicate that most of the revenue generated by the team comes during the IPL season. This means that if you buy CSK shares at the start of the IPL season, there is a high probability of you getting a good ROI.
Should Seasonal Investors Consider Investing In CSK
Buying CSK unlisted shares is an excellent choice for seasonal investors mainly because of its performance in every season. CSK share prices are expected to increase during the IPL season every year. For example, the share price of CSK has increased 1.5X in the last 10 months. In September 2022 the share price was at around ₹110 and in October 2023, it went up to ₹161 per equity share. This shows the constant growth of CSK share price.
Before buying its shares, make sure you do a thorough research of the team’s financial reports. You should go through the financial metrics and evaluate the company yourself. While buying the shares make sure you buy it through a trusted and certified trading platform like Stockify. It allows you to trade shares easily and safely while providing an array of financial reports for you to go through and make an informed decision.