Sun TV owns three cricket franchises: SunRisers Hyderabad in the Indian Premier League (IPL), SunRisers Eastern Cape in Cricket South Africa’s T20 League, and SunRisers Leeds Ltd. in The Hundred in the UK.
If the demerger goes ahead, it could potentially unlock significant value for shareholders, according to a brokerage report.
Sun TV’s market capitalisation currently stands at around ₹24,000 crore, while its free cash position is estimated at around ₹8,000 crore.
According to the brokerage report, the IPL franchise could be valued between $1.4 billion – 1.5 billion, or approximately between ₹13,000 crore – 14,000 crore.
IPL-related revenue accounted for 33% of Sun TV’s revenue in the first quarter, according to the report.
The valuation of IPL franchises has risen sharply following major deals this year. Royal Challengers Bengaluru (RCB) is valued at around $1.78 billion, or approximately ₹16,660 crore, while Rajasthan Royals (RR) is valued at around $1.63 billion, or approximately ₹15,286 crore.Shares of Sun TV are now trading 14% higher on Wednesday at ₹626.2. The stock has now turned positive ona year-to-date basis following the surge seen in the stock price over the last eight trading sessions. In fact, the stock has gained in nine out of the last ten trading sessions.