Owners are ‘borrowing’ from themselves to splurge on Delhi Daredevils
Even after eight years of IPL glitter, there is a huge question mark over the financial health of GMR group-owned Delhi Daredevils (DD). Water was supposed to turn into wine after the first three seasons, but the team is operating on a huge loan deep into the eighth season.Updated: May 07, 2015 16:03 IST
Even after eight years of IPL glitter, there is a huge question mark over the financial health of GMR group-owned Delhi Daredevils (DD). Water was supposed to turn into wine after the first three seasons, but the team is operating on a huge loan deep into the eighth season.
In its extraordinary general meeting of the shareholders last year, GMR Sports Private Limited (GSPL), the company which owns Daredevils, authorised its directors to take a loan of up to Rs 200 crore from banks and financial institutions.
“Considering the plans and proposed new jobs/work to be undertaken by the company, the directors have considered it desirable to fix the borrowing powers at Rs 200 crore with the consent of the shareholders by the way of special resolution,” read the minutes of the EGM held on April 9, 2014.
Since December, the company has borrowed Rs 57 crore from other GMR companies to run the team. “This season is very crucial for us. If the team fails to reach the semis or final, things could be difficult for us. It really is a tough time ahead of us,” a key franchise official told HT.
The GMR group, an infrastructure major whose immediate Capital connect was that it was developing the Delhi airport, paid $84 million (Rs 532.9 crore in current exchange rate) in 2008 to acquire the rights for the Delhi franchise. In seven years, Daredevils have qualified for the semifinals twice (2008, 2009) and reached the play-offs once (2012). However, there isn’t much to boast of on the balance sheet.
GSPL passed a resolution at its board of directors meeting on February 21, five days after this year’s players’ auction, to borrow 50 crore from Grandhi Enterprises Private Limited, a GMR company. SPENDING FREELY Interestingly, Daredevils had no hesitation in making the highest bid in theFebruary 16 auction, splurging Rs 16 crore for the services of Yuvraj Singh, a batsman no longer in his prime. It also bought Angelo Mathews for Rs 7.5 crore and the injury-plagued Zaheer Khan for Rs 4 crore.It paid Rs 2.6 crore for young batsman Shreyas Iyer and Rs 3.2 crore for seasoned spinner Amit Mishra. Grandhi Enterprises also lent Rs 5 crore in December to GSPL, which borrowed another Rs 2 crore from GMR Projects Private Limited that month. With two seasons left after the current edition in a tournament which was initially planned for 10 years, Daredevils will perhaps have to worry more about existence than playoff chances.
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First Published: May 07, 2015 09:21 IST