On the face of it, the future of Chennai Super Kings, which was called into question by the Supreme Court, has no substantial impact on its owner, India Cements, or the company’s shareholders.

But the market apparently thinks otherwise. The stock has lost 17 per cent over the past ten sessions, even as the Sensex rose, reacting to the findings of the Mudgal Committee report. The report had held Gurunath Meiyappan, son-in-law of India Cements Managing Director and BCCI president-in-exile N Srinivasan, guilty of betting.

The stock fell 3 per cent, intraday, on Thursday and closed 0.6 per cent down, after the Supreme Court made its observations and questioned why CSK should not be disqualified from the IPL.

Dips in the India Cements stock have followed bad news on the arrests of Sreesanth on May 16 2013 (down by 2 per cent on the following day) and Meiyappan on May 24, 2013 (by 2 per cent, also the following day).

India Cements was the worst performer among cement stocks in 2013, falling 36 per cent.

CSK, a brand valued at about $72 million (₹445 crore) currently, is hardly a money spinner for India Cements. Income contributed by the CSK franchise was ₹136.6 crore in 2013, accounting for just 2 per cent of India Cements’ total revenues.

IPL franchise owners make money from their share of central revenues (sponsorships and rights sold by the BCCI) and prize money as well as tickets and merchandise.

IPL has been mired in controversies since its launch in 2008. Things only worsened after the Cricket Association of Bihar filed a PIL against Srinivasan on the conflict of interest arising from his position as BCCI chief as well as the owner of CSK.

While India Cements might not be impacted financially if it loses CSK, investor sentiment towards this stock is likely to be hurt.

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