Chennai: The India Cements Ltd. scrip slipped on Tuesday but later recovered -- albeit partially -- as uncertainty loomed over the company's demerger of Chennai Super Kings division into a subsidiary after Justice Lodha Committee's order suspending the cricket team for two years.
The scrip with a face value of Rs.10 opened at Rs.94.55 at the Bombay Stock Exchange but slid to Rs.88.25 during the morning trade. The scrip later recovered to Rs.91.15.
The Supreme Court-appointed Justice Lodha Committee on Tuesday suspended the Chennai Super Kings team for two years from the Indian Premier League (IPL) and also suspended for life its former team official Gurunath Meiyappan from any cricketing activity.
Meiyappan is the son-in-law of N. Srinivasan, vice chairman and managing director of India Cements.
Meanwhile, uncertainty prevailed on the restructuring process and the impact on India Cements due to the investments made in Chennai Super Kings.
Last fiscal, India Cements transferred the IPL franchise rights to Chennai Super Kings Cricket Ltd. (CSKCL), a wholly-owned subsidiary, at its net assets value (NAV) of Rs.7.83 crore.
The company board in February 2015 approved the sale of entire shareholding in CSKCL aggregating to 50,000 shares of Rs.10 each to a trust called India Cements Shareholder Trust (ICST).
Three of the independent directors of the company were designated trustees of the new entity which was assigned the task of distribution of shares of CSKCL in due course to all non-promoter shareholders.
The shares that promoters were entitled to would be allotted to another trust created for the benefit of former cricketers of India Cements.
The company had earlier said that the IPL team was instrumental in creating awareness about its cement brands in the market.