The 2025 season of the Indian Premier League (IPL) has entered the final phase. Four teams – Gujarat Titans, Punjab Kings, Royal Challengers Bengaluru and Mumbai Indians, shall now play for the coveted trophy.
This session of the IPL has some valuable lessons for investors, in my view. In particular, I found the following most interesting.
· Two out of the top four teams have never won the IPL trophy previously. Mumbai Indians, has won it five times (2013, 2015, 2017, 2019, 2020), while Gujarat Titans won it once (2022). Five-time winner Chennai Super Kings (CSK) finished the 2025 season at the bottom of the league table. Three-time winner Kolkata Knight Riders ended at 8th place.
· Several of the most successful players of the previous two seasons were either retained or bought at aggressive prices in 2025. Many of these players failed to perform in the current season. Some of the prominent underperformers were Rishabh Pant (Rs27cr), Kagiso Rabada (Rs10.75cr), Venkatesh Iyer (Rs23.75cr), Rashid Khan (Rs18cr), Dhruv Jurel (Rs14cr), Riyan Parag (Rs14cr), Rinku Singh (Rs13cr), Shivam Dube (Rs12cr), Ruturaj Gaikwad (Rs18cr), Mayank Yadav (Rs11cr), Ishan Kishan (Rs11.25cr), Nitish Reddy (Rs8cr) Tilak Varma (Rs8cr).
· Some players who commanded a low premium at the 2025 auction performed much better than expectations. Some of the prominent outperformers were Karun Nair (Rs0.50 cr), Sai Kishore (Rs2cr), Digvesh Rathi (0.30cr), Ryan Rickelton (Rs1cr), and Ajinkya Rahane (1.5 cr).
· The owner of Lucknow Super Giants (LSG), snubbed their 2024 captain K. L. Rahul, and opted for a very expensive Rishabh Pant. K. L. Rahul performed extremely well playing for Delhi Capitals, while Rishabh Pant was a massive failure both as a player and captain.
· Rohit Sharma, M. S. Dhoni, Ravinder Jadeja, Rashid Khan etc. were some legends that failed to perform miserably.
Lessons for investors
(i) The past performance of a stock/fund (player) or sector/fund house (team) is no guarantee for its continued performance in future. A strong performance in the recent past actually raises the chance of underperformance in the near future.
(ii) Chasing momentum and paying high price for a stock (player) based only on its recent performance, without evaluating the sustainability and consistency of its good performance in future may cause disappointment and losses. Buying Mayank Yadav for Rs 11cr, without factoring in that his bowling action makes him injury prone, inconsistent and unsustainable player.
(iii) Never sell a highly promising stock (player) just because it had few bad quarters. LSG owners must be regretting one such mistake, at least.
(iv) After consistent performance over several years, fatigue sets in even in the best of the players and teams. Good players and teams either reinvigorate themselves or leave the ground for emerging starts. Stocks and sectors that are showing fatigue, but neither reinventing themselves nor leaving the space (M&A), need to be jettisoned from portfolios without much delay. Love your families and friends not stocks.
(v) It’s a good idea to keep watch on the past favorites, who had fallen out of favor for underperformance. If they begin to show promise again, do not hesitate to invest in them, just because you had a bad experience with them in the past.
(vi) Paints, Private Banks, Consumer Staples, large IT Services are some examples of the strong past performers experiencing growth fatigue. Watch such stocks/stocks carefully for signs of failing or reinvigoration. Either way, they might provide an actionable idea.
(vii) Keep a close watch on the emerging stocks/sectors, but do not rush to buy (at obscenely priced IPOs, for example). Some of them could become legends, but many of them may fail to deliver on their promises.
(viii) Last but not the least, there could be top players (stocks) in an underperforming team (sector). Do not lose sight of such stocks (players).
