Recently, two new teams have been added to the IPL with two new owners. But why are private equity investors interested in the IPL? Why are they putting up this kind of money?
In October, The IPL's Governing Council had issued an Invitation to Tender (ITT) for the acquisition of two more franchises. Business magnate Sanjiv Goenka and foreign equity investment firm Irelia Company Pte Limited (CVC Capital) paid a total of Rs 12,715 crore (about $1.7 billion) to win the bids for two new IPL clubs, significantly above the BCCI's expectations. The PE firm CVC Capital Partners became the first private equity firm to own a club in the multibillion-dollar cricket competition after the successful bid. The BCCI hoped for a total bid of Rs 10,000 crore but instead received Rs 7,090 crore from Goenka's RPSG Group for the Lucknow franchise, and Rs 5,625 crore from CVC Capital for the Ahmedabad squad. The two new teams will compete in the IPL in 2022. In December, the super auction for the 15th edition of the Indian Premier League, IPL 2022, will take place. After owning the Rising Pune Supergiants for two years in 2016 and 2017, Goenka was considered one of the favorites to win a team. The auctions were held in Dubai, and several major industrial conglomerates, as well as well-known Bollywood celebrities took part. Adani Group, which offered roughly Rs 5,000 crore, was one of the corporates that missed out, while Glazers from Manchester United and Torrent Group also came up short.
Only five to six real bids were in the running after 22 businesses picked up the tender document worth Rs 10 lakh. The base price for new teams was set at Rs 2,000 crore, so only five to six serious bidders were in the running. The Aurobindo Pharma, Torrent Pharma, and HT Media were among the other companies that competed in the auctions. CVC Capital is based in Luxembourg and manages $110 billion in assets. In the Americas, Europe, and Asia, it is recognized for private equity and credit investments. The private equity firm has made various sports ventures in the past. Dorna, the Moto GP brand, Formula 1, and Premiership Rugby in the United Kingdom are among them. It agreed to pay $3.2 billion for a 10% stake in La Liga, the Spanish soccer league, in August. CVC invests in India out of its Asia funds. Last year, at the height of the coronavirus pandemic, it raised $4.5 billion for its fifth Asia-Pacific fund, exceeding its goal corpus of $4 billion. There were also two prospective bidders from outside India who participated in the ITT process, which demonstrates the IPL's global appeal as a sports product.
By:-
Bhargab
Comments