CESC, Phillips Carbon plunge 3-7% on investment in IPL team

Antique in its client note says this is a negative development for the company as it expects cash outflow of Rs 100 crore per annum for this team.CESC is a Calcutta-based power utility company and Phillips Carbon is the country's largest carbon black manufacturer.

According to the brokerage, topline will be highly dependent on the team winnings.

While clarifying on this unrelated investment, CESC Chairman Sanjiv Goenka says that the CESC will not see any cash outflow due to the IPL team. Except Phillips Carbon Black, none of the other subsidiaries will see cash outflow, he adds.

The IPL team will not remain the group's subsidiary for a long time, he says adding that the Group will own the team for a period of two years and will pay Rs 16 crore to BCCI every year. Other expenses will depend on factors like sponsorships and the Group will benefit from various branding opportunities, he says.Read more: IPL buy: CESC chief sees 'some' outgo from Phillips Carbon

Recently, country's largest healthcare company Sun Pharma also got punished by the street after its subsidiary showed its intention to enter into wind energy business. However, later on, the company had withdrawn its wind energy business plan.

At 12:03 hours IST, the scrip of CESC was quoting at Rs 514.65, down Rs 32, or 5.85 percent and Phillips Carbon Black fell 3.07 percent to Rs 126.20 on the BSE.

Posted by Sunil Shankar Matkar