Two new owners for two new city teams of the Indian Premier League (IPL) cricket will emerge from a list of 14 probables on Sunday when the BCCI announces the names of the successful bidders. Stiff competition between the buyers however could make their deal over-priced with some experts pegging the winning bid at around $400 million, as against the base price of $225 million.
During the tender process held earlier this month, Videocon Industries and Adani Group are believed to have put in bids of around $250-275 million each. However, these bids were cancelled after the IPL governing council decided to call for a re-tender.
“It does not make sense to buy a franchise for more than $300 million because that’s financially unviavle. However, the competition among the bidders may push the acquisition cost up,” said Hiren Pandit, managing partner at GroupM, a leading globl media investment management firm.
The city franchises up for bids include Nagpur, Pune, Ahmedabad, Kanpur, Dharamshala, Indore, Cuttack, Gwalior and Visakhapatnam. Two cities which recieve the highest bids will emerge as the two new IPL teams that will participate in the league from the fourth season onwards.
Several interested parties had raised concerns over the pre-condition of bidders having a networth of $1 billion and producing advance bank guarantee of $100 million. Under the new tender process, the bidders are expected to pay a $10 million guarantee before the tender documents are opened. The winning bidders then pay 10% of their bid amount within 48 hours.
Sources close to the development said that the real competition is between Videocon group promoter Venugopal Dhoot in consortium with Bollywood stars Saif Ali Khan and Kareena Kapoor who are is vying for the Pune franchise, Gautam Adani for Ahmedabad, filmmaker Priyadarshan along with Abu Dhabi’s Sheikh Mansour bin Zayed al-Nahyan for a Kerela team and Sahara Group and Dainik Jagran, Jaypee Group and a consortium led by City Corporation’s Anirudh Despande for Pune.
Fourteen potential franchise owners are said to have bought the Rs 5 lakh tender document which have to be submitted by 10 am on Sunday, in Chennai. Following this, the IPL governing council will announce the winners.
