Shares of India Cements surged sharply in early trade on Thursday after the company's board on Wednesday decided to vest the ownership of its Indian Premier League franchise, Chennai Super Kings (CSK), in a wholly-owned subsidiary.
The stock jumpepd 14.11 per cent to Rs 108.40, despite posting loss of Rs 11.7 crore for the quarter ended December 2014, as against profit of Rs 42 lakh reported in the comparable year-ago period.
N Srinivasan, Vice-Chairman and Managing, India Cements, after the board meeting on Wednesday said: “Pursuant to the decision of the board of directors of India Cements, the IPL franchise is transferred to its wholly-owned subsidiary, Chennai Super Kings Cricket Ltd.” The subsidiary will be owned by India Cements shareholders on a proportionate basis.
Over 70 per cent of the shares in India Cements is with the public while the promoters and promoter group hold 28 per cent. Of this, Srinivasan holds a 0.14 per cent stake while the rest is with holding companies and others.
The move could help 92,000 small shareholders who own 7.04 per cent stake in India Cements.
The decision is significant in the light of the Supreme Court’s ruling last month on the IPL 2013 betting and match-fixing case, in which it saw a conflict of interest in officials of cricket regulator The Board of Control for Cricket in India owning a franchise.
Srinivasan had to step aside as BCCI president during the litigation and investigations.
Broad-basing the ownership of CSK is significant as this is the first time an IPL franchise will be widely held, he said.