What Happens With Chennai Super Kings, As Owner India Cements Gets Acquired?

What will be the impact of UltraTech’s acquisition of India Cements on Chennai Super Kings Ltd., one of the most successful teams in the Indian Premier League?

Well, CSK will remain with N. Srinivasan and his family. India Cements was originally the franchise owner of CSK. It was kept as a division of ICL.

When a row erupted over the conflict of interest in the wake of N. Srinivasan heading the BCCI, ICL hived off CSK into an independent company in early 2015. Each shareholder of ICL was allotted CSK shares in proportion to the holding in ICL. As a consequence, CSK shareholding pattern became a mirror image of the shareholding pattern in India Cements. Since Srinivasan and his family held 29 per cent stake in India Cements, they were allotted 29% shares in CSK, too. Subsequently, when the conflict-of-interest issue further escalated in the wake of his daughter Rupa Gurunath getting elected as president, Tamil Nadu Cricket Association (TNCA), the promoters transferred their entire holding in CSK to a trust formed to benefit the cricketers employed by India Cements. Rupa subsequently quit the TNCA position.

With no positions in the cricket administration, the conflict-of-interest issue surrounding the promoters disappeared. Srinivasan and his family too have since returned as promoters of CSK.

The changes found mention in the Chennai Super Kings Annual Report, 2022-23. According to the annual report, the trust had distributed almost its entire holding of CSK shares to eligible promoter and non-promoter shareholders of India Cements. The stake held by the India Cements Shareholders’ Trust came down to 1.76% in 2022-23 from over 30 per cent in the previous year. The trust distributed 384,882 CSK shares to non-promoter shareholders of India Cements and 86.7 million shares to promoters of India Cements, according to the annual report.

Srinivasan and his family now own 28.14% of CSK. The latest annual report lists seven names as promoters: EWS Finance & Investments (21.47%); Rupa Gurunath, as trustee of the Financial Services & Securities Services Trust (6.48%); N. Srinivasan (0.14%); Chitra Srinivasan (0.02%); Rupa Gurunath (0.01%); S.K. Ashok Baalaje (0.02%); and Rajam Krishnamurthy (1,940 shares). None of these seven promoter names held any CSK shares in the previous year. The Damanis, it may be recalled, had started buying into India Cements shares only since 2019 – a few years after the formation of CSK as a separate company. Srinivasan and his family have since reportedly taken their holdings in CSK to more than a comfortable majority.