The door was to open for attractive equity deals soon after the completion of the third edition of the Indian Premier League (IPL). Don’t expect that too soon as the IPL is caught in the midst of a political storm, allegations of match-fixing and betting, and an intense internal power struggle.
The IPL franchise owners will wait for the dust to clear as Income-Tax sleuths threaten to expose the faultlines that have developed along the way. New equity suitors like Videocon will also hang on till the authorities give a clean chit on the ownership holdings of the IPL teams.
“Deals will take time now. We are not looking at selling stake,” said Kings XI Punjab co-owner and Dabur India Ltd. director Mohit Burman
Kings XI Punjab had grabbed media limelight with Videocon chairman Venugopal Dhoot stating that he was in talks to buy a stake in the franchise. Videocon was to float a special purpose vehicle which would invest into an IPL team.
So will Videocon step up its pace to acquire an IPL franchise now? “I wouldn’t like to comment on anything,” he said.
Kings XI Punjab, under a cloud at the moment, has Nes Wadia, actress Preity Zinta, Burman and Karan Paul as owners.
Deccan Chargers Sporting Ventures Ltd, a 100 per cent subsidiary of Deccan Chronicle Holdings, is also not looking at diluting equity at this stage. Making clear its shareholding after the Kochi franchise was dragged into controversies, Deccan Chargers Sporting Ventures said it owns 100 per cent of Deccan Chargers.
“Deccan Chargers would have a valuation of over $300 million, given the winning price for the two new franchises. We are, however, not looking at diluting stake. Controversies will happen but IPL's value will not be negatively affected,” Deccan Chronicle Holdings managing director PK Iyer told Indiantelevision.com.
Investment bankers feel a prudent approach will be to wait longer for valuations to climb as controversies die down. “The IPL franchise owners will want the dust to settle down before taking calls. One shouldn’t be too worried as there is a strong spectator and advertiser interest for the IPL. Real money is being made as the format is useful and here to stay. The last round of bidding went for higher monies. There is nothing wrong at the franchise level as corporate biggies like Mukesh Ambani, Vijay Mallya and Sahara have put their bets on the game,” said Enam Investment banking head – Media & Telecom Salil Pitale.
Equity deals are expected to halt till the mud-slinging phase is over and the air clears on several controversial issues. “Nobody wants to put money into something that may not be clean. Till the issues do not get resolved, people may wait before making stake acquisitions,” said an investment banker on request of anonymity.
Source: Indian Television