IPL team valuations get a scandal scare | india | Hindustan Times
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IPL team valuations get a scandal scare

india Updated: Apr 22, 2010 23:55 IST

The IPL may still be attracting viewers and advertisers to make it lucrative, but the recent controversy has made a dent on its investment prospects as team owners come under scrutiny that threatens its so-far dizzying valuations, experts tracking the tournament said.

A source familiar with the development said that companies like Videocon Group and the Gujarat-based Adani Group, which had earlier shown a keen interest in entering the IPL fray may have second thoughts and adopt a wait-and-watch policy though officially, both insist they are seriously interested. “These have listed entities and at this point, may not be willing to
throw their hat in the ring,” a source familiar with the developments told HT.

Further, a serious contender who has shown keen interest in buying stake in one of the IPL teams said that valuations have come down substantially over the last one week. “The valuations have eroded by almost half due to recent controversies and if they continue to drag valuations may go down even further,” the contender told HT.

Alok Dhir, managing partner of legal firm Dhir and Dhir Associates said that the long term brand value would depend on how things unfold in the near future. “Since valuation was based on subjective factors, it has eroded significantly,” Dhir said.

Valuation of IPL teams had zoomed after Subroto Roy-controlled Sahara Adventure Sports’ and Rendezvous Sports acquired the Pune and Kochi teams for higher-than-expected $370 million (Rs 1,700 crore) and $ 333 million (Rs 1,500 crore) respectively, when the auction for two new teams were held last month.

However, the alleged web of financial irregularities are bound to significantly erode valuation of clubs affecting their plan to offload stake.