Impact of major cricketing events on Indian stock returns

Abstract

In the initial project proposal, we considered working on one out of a variety of possible topics to study inefficiencies in the Indian equity markets. These are listed below: a. The impact of sports-related events (examples below) i. IPL match results ii. Indian team victory in a major tournament such as the ODI World Cup, Border-Gavaskar Trophy, etc. b. The impact of cultural events (examples below) i. An Indian-origin Nobel prize winner ii. Festivals such as Diwali, New Year, etc. iii. Release of a highly awaited film with a “star” cast It was ultimately decided to pursue option a(i) due to factors such as ease of access to data, relatively high frequency of IPL matches, cultural significance of cricket in India, etc The scope of the study was narrowed to the analysis of whether there exists a correlation between IPL team performance and the holding company’s stock returns. Six IPL teams (holding company) were shortlisted for this exercise based on the size of the associated holding companies – Mumbai Indians (Reliance Industries Limited), Chennai Super Kings (India Cements Limited), Royal Challengers Bangalore (United Spirits Limited), Delhi Capital (JSW Holdings), SunRisers Hyderabad (Sun TV), and Punjab Kings (Dabur Limited).