IPOs to follow IPL: Three teams may sell stake
At least three of the 10 teams in the Indian Premier League (IPL) are planning initial public offerings (IPO) or other forms of stake sales of their clubs. Sources tracking the IPL said they expected a lot of fresh investment activity in the coming months. Gaurav Choudhury reports.business Updated: Mar 23, 2010 09:52 IST
At least three of the 10 teams in the Indian Premier League (IPL) are planning initial public offerings (IPO) or other forms of stake sales of their clubs.
Sources tracking the IPL said they expected a lot of fresh investment activity in the coming months leading up to the fresh player auction in September-October.
According to IPL rules, for first three years no owner can exit by selling its entire stake.
Investment banking sources said India Cements Ltd, which owns the MS Dhoni-led Chennai Super Kings (CSK), is likely to be the first off the block in the race to getting the club listed on stock exchanges as a separate entity.
"The management had made its intention clear to put it (CSK) separately to another company,” an analyst who had participated in an India Cements analysts’ conference said. “When it passes that first holding period of three years, it plans an IPO to realise the value.”
CSK is the only team that had achieved break-even in the first year itself. India Cements Vice chairman and managing director N Srinivasan said such reports were speculative.
“All I can say is that today it is well ensconced within India Cements,” Srinivasan, who is also the Secretary of Board of Control for Cricket in India (BCCI), said.
Kings XI Punjab, which is owned by a consortium of promoters including Ness Wadia and Preity Zinta, is also learnt to be keen on divesting if it gets the right price.
The management, however, was tight lipped. “I cannot talk about it at this moment,” its CEO Anil Srivastava said.
The Subroto Roy-promoted Sahara Adventure Sports, which stunned everybody by picking up the Pune team for a $370 million (Rs 1,702 crore) has also not ruled out the possibility of an IPO or a selling minority stake to a strategic partner.
“There are umpteen opportunities such as an IPO or selling stake to a new partner,” a Sahara India Pariwar spokesperson said.
Venugopal Dhoot whose V C Digital — which with a bid of $320 million (Rs 1,470 crore) lost out in the auction for the two new teams on Sunday — is keen to buy a minority stake in one of the existing teams.
“I am disappointed that we lost out by a small margin,” Dhoot said. “But at this point, I do not want to comment.”
Sources, however, indicated that Dhoot is keen on picking up 10 per cent stake in the newly set up Pune team.