IPO Yatra to begin shortly in IPL
NEW DELHI: With valuations out of the way, can Initial PublicOfferings be far behind? Investment banking interest has perked up inthe wake of the rich valuations discovered through the two teamauction. Sources close to developments have revealed that at leastthree city based clubs are looking at the possibility of IPOs or stakesales in 2011. With the doubling of the central revenue pool courtesymore broadcast revenue share as also new vistas being explored throughnew monetisation opportunities like the licensing deal with Colors -$130 million over three years, MRF for the blimp, Karbonn Mobiles,Maxx Mobiles, youtube et al, operating profit levels are expected toramp up significantly as sportzpower has been outlining. Moreover withthe IPL returning to India gate receipts and advertising revenuesthrough in stadia and team jersey deals have also shot upconsiderably.
In the run up to the new player auction sometime in September-October,expect many stake sale deals being firmed up. The three year cap onsale of a team also ends with the conclusion of season 3. Till nowonly 49 percent stake could be offloaded by a franchise. Investmentbanking sources on condition of annonymity stated that N Srinivasanowned India Cements Ltd, which owns M.S.Dhoni-led Chennai Super Kings(CSK) directly, is likely to be the first to get the Chennai basedclub listed on stock exchanges as a separate entity.
As sportzpower has mentioned earlier, at a recent investor conference,the CSK owners outlined this imperative. CSK along with KKR was one ofthe few sides in season one to stay in the black. BCCI secretary andIndia Cements vice chairman and managing director N. Srinivasanhowever, has termed these reports as speculative. Similar speculationhas been doing the rounds about Kings XI Punjab where Karan Paul, NessWadia Mohit Burman and Preity Zinta are co owners could be in theprocess of divesting equity to Hero Honda's Pawan Munjal. Both sideshave been denying this vehemently. Earlier it was reported that Munjalhad bought out the entire shareholding for $260 million, but thatcould not happen till the culmination of season 3. It is certainlypossible anytime after April 25. But the valuation has just gonethrough the roof.
Subroto Roy promoted Sahara Adventure Sports, which stunned everybodyby bidding the highest for the Pune franchise on Sunday has also notruled out the possibility of an IPO or a selling minority stake to astrategic partner. “There are umpteen opportunities such as an IPO orselling stake to a new partner. Its too early to talk about it now,”Abhijit Sarkar Corporate Communications head,, Sahara India Pariwarsaid. By roping in the Bachchans, Roy will surely pump prime theclub's glam quotient and valuation.
The other sides which could look at a listing in 2011 are reportedlyVijay Mallya's UB Group owned Royal Challengers and Deccan Chronicleowned Deccan Chargers. Before DC won the title in 2009, it was a nohoper side and was even reportedly put on the block. But it found thata valuation of Rs 1240 crore was a bit much for investors.Subsequently media buying house bought 20 per cent in the franchise.But it is known at what price.
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