IPL 2025 | Explained: How insurance giant LIC has earned more than 500% in CSK over six years?

The Chennai Super Kings (CSK) are arguably one of the most successful teams in the Indian Premier League (IPL) with 12 playoff appearances, 10 finals, and five titles under their belt. Not only does this mark them as one of the strongest contenders in the league, it shows their incredible performance on the cricketing field, however, off it, they seem to be turning heads with their fiscal prowess as well, all thanks to the Life Insurance Corporation of India (LIC)

When LIC had acquired a portion of the Chennai Super Kings, little did they know that it would end up paying off so heavily. Now, CSK’s 6.04% ownership is comprised of shares that LIC possesses and reporedly, these shares have increased in value by over 529% since 2019, getting them acclaim from multiple industries. This is how it all started, and this is where we look towards the future.

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LIC owned 1.8 crore shares of India Cement which owned CSK back in IPL 2008, and due to the changes in franchise structure during 2014, CSK was operational as an independent unit. There were new shares to be divested for the newly established company fund, and LIC’s shares translated into the required proportion of stock.

In that period, shares of CSK, which were unlisted, had a valuation of Rs 31 per share. By 2024, those shares skyrocketed to Rs 190-195, peaking at Rs 223 in 2022. This increase of 529% (from Rs 31 to Rs 195) on LIC’s stock turned his investment into a 6x windfall which came close to Rs 1,000 crore in profits (considering stake size and price appreciation).

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A modest stake, a massive return

LIC was given a 6.04% stake in CSK in 2014, though not directly. The journey started in 2008 when CSK was under India Cements, and LIC owned 1.8 crore shares.

Start of 2024 marks over 5.2x increase in LIC’s investment value, which stands at approx. Rs 1,000 crores today.As per reports, LIC’s investment out of India Cements morphed Cements equity into CSK branding emerging as a powerhouse. Peak share cost recorded in 2022 stood exceptionally high at Rs 223, showcasing these two constituencies as economic powerhouses.

What fuelled this growth?

The primary reasons include explosive growth in financials, new era branding expertise coupled with adept media strategies.‘Blasting’ seems the only appropriate word to describe the core income constituents from advertisement deals forming the backbone of Texas based franchises sponsorship agreements. CSK alone foresaw a 150% hike in broadcasting and sponsorship income for 2024, translating to an impressive Rs 479 crore.

Profit After Tax (PAT) also saw a surge. In FY23, it was just Rs 14 crore, but in FY24 it rocketed to Rs 201 crore. This is an insane 1,365% increase.

Media rights windfall

IPL's media rights auction was a defining moment for investors given how teams associated with IPL, including CSK, had their balance sheet enhance significantly after the auction due to the unprecedented surge in media rights. In 2023, the league sold its media rights for the next 4 seasons for US$6.4 billion toViacom18 and Star Sports, meaning each IPL match was valued at $13.4 million.

The Dhoni effect

Looking beyond the figures, 'Dhoni Factor' has equally strong relevance. With MS Dhoni fondly known as 'Thala' (leader) having popularised CSK, their devoted fandom can be correlated to brand value and prowess in endorsements and sponsorship.CSK's marketing is among the most potent in the league with supporters of all ages and regions. The partnership with Muthoot Group further cements their lead in branding.

It also shows why LIC backs CSK. In India, cricket isn't just another past time; it's a full blown industry.